As the insurance industry emerges from recession, it faces a sea of challenges. The economic slowdown has intensified price competition, hitting margins at a time when market turmoil has depressed revenue streams from many insurance holdings. Similar difficulties in adjacent financial sectors have brought new competitors—for instance, joint ventures between banks and financial advisers—into the insurers’ traditional terrain. Structural changes continue to shift global revenue pools to emerging markets, while customer behavior is shifting as more transactions move online.

In this environment, the industry must not only focus its strategic attention on areas from better financial and risk-pool management to M&A but also develop innovative, growth-oriented products that can secure the loyalty of existing customers and attract new ones. Yet in the face of this challenge, insurers may be neglecting an important tool: technology. Across a number of industries, rapidly changing technologies have been changing the post-recession competitive dynamic. Web and communications technologies are spurring ways of creating products and reaching customers, as well as opening doors to more efficient and effective ways of delivering products and services. They are also giving rise to entirely new business models.

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