In 2013, the global insurance industry has never faced such a combination of turmoil, economic uncertainty and opportunity.
Although the US Congress agreed to a deal that effectively softens the “fiscal cliff”, relief may be only temporary, with a decline in consumer savings still a looming concern.
Interest rates are likely to stay at record low levels for the foreseeable future. Investment returns are likely to remain weak, compelling property/casualty carriers to improve underwriting margins. This will require difficult decisions on pricing and operating approaches.
Technology remains a bright spot as insurers continue to improve operational efficiencies and invest in analytical capabilities that encourage business expansion and enhance the customer experience.
Further automation of the value chain, new underwriting systems, rating engines and claims management solutions will entice more investment expenditures.
In spite of these challenges, there are many opportunities for insurers to seek competitive advantages. The most successful will have:
- Strong corporate governance
- The ability to quickly access and move capital
- Low-cost, flexible and agile operating models
Our global insurance outlook explores the issues confronting global insurance organizations in 2013. We offer our perspective on the insurance markets in Asia-Pacific, Europe, Nordic, US life and property/casualty sectors and the newly added Latin American market.