Global Insurance Industry Outlook | Insurance

While the insurance industry faces challenges over the short- and long-term – due to a softening market, pricing pressure and increased global competition – there is tremendous opportunity for carriers that pursue growth strategies in addition to cost efficiencies, according to Deloitte LLP’s "Global Insurance Industry Outlook – Mid-Year Update 2008."

The report provides insight about insurance industry trends through a review of critical issues, an examination of core fundamentals and an analysis of underlying factors. Findings from the report include:

Viewing distribution as a profit, not cost, center that drives differentiation and growth can help insurers archive success through better alignment with agents and a multichanneled approach toward marketing.
The retirement market offers insurers a unique opportunity because, unlike competitors such as mutual fund companies, it is able to offer “guaranteed” products.
New analytics tools such as synthetic data and unstructured text applications add to the already powerful analytics repertoire and create opportunities for both profitability and efficiencies in claims administration, underwriting, marketing and distribution.
Insurers need to manage across generations and look beyond recruitment to emphasize talent development and customized career options in order to retain employees and compete with other industries for new talent.
Enterprise risk management (ERM) takes on an important role in the face of International Financial Reporting Standards (IFRS), Solvency II and the move by rating agencies to include ERM assessments in ratings.
A refocus on the integration portion of merger and acquisition (M&A) execution through upfront planning helps to achieve sustained success and growth.
With the majority of life insurer information technology (IT) budgets being spent on nondiscretionary legacy system support and operation, a refocus on cost reductions in that area should be considered and reallocated to virtualization, e-service and call centers.
Insurers need to catch up with banking and securities sectors and execute a “build, buy or both” offshore strategy.

View the report attached below.