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2013 Property & Casualty Insurance Industry Outlook

Poised for sustained growth, but challenges remain


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As the economy goes, so goes the property-casualty insurance industry. And while an economic recovery has been underway in the U.S. for quite some time, thus expanding the available pool of insurable exposures, we still have a ways to go to recover the jobs and regenerate the business activity that was lost following the 2008 financial contraction. Slow and unsteady economic growth, low interest rates, and mounting catastrophe losses, most recently courtesy of “Superstorm” Sandy, continue to depress the balance sheets of a number of carriers.

Still, there are significant signs of improvement in the U.S. economy. Private sector rehiring, gains in the automobile and housing markets, and expansion of domestic energy production and manufacturing are among the macro-trends likely to instill more confidence in the economy and spur stronger growth in insurance sales.

To adapt to this “new normal,” there are actions carriers can take not only to leverage new opportunities emerging in the short term, but to set the stage for longer-range gains, in part by improving their technology and talent base as well as their marketing and distribution capabilities.

In 2013 senior-level property-casualty insurance executives are likely to confront a series of 10 interdependent challenges that should be addressed for carriers to thrive, cited in the accompanying graphic below.

There are undoubtedly additional threats and opportunities on the radar of individual carriers. But few insurers will be able to avoid this list of 10 challenges, while those that can overcome at least a few of them will be far better positioned to take on whatever other crises emerge in 2013 and through the rest of what could be a turbulent decade indeed.

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