A survey conducted by Munich Re America that targeted insurance executives to determine their most pressing concerns revealed what most in the industry know: the economy still presents a challenge, but less so than last year.
Results of the 2010 survey of 30 respondents were discussed by a number of insurers last week at Munich Re’s 16th annual CIO Roundtable in New Jersey.
Before presenting the survey results, Anthony Kuczinski, president and CEO of Munich Reinsurance America Inc., acknowledged the difficult circumstances under which the industry operated in 2009, including the bottoming-out of the economic market in the 1st Quarter 2009, which served as a backdrop to last year’s event.
Kuczinski framed the survey results with a note that “what if?” scenarios lead to one of the most important lessons learned from the economic crisis - the importance of pricing and underwriting discipline through the underwriting cycle leading to consistent and profitable returns in the long term.
Therefore, despite the financial difficulties, the industry rebounded quickly to post positive results in 2009, Kuczinski noted.
The survey asked respondents to identify issues that they believe are those most critical facing the entire industry. Of the survey respondents, 69% cited poor economic conditions as their chief “critical issue,” noting that number is down from 85% in last year's survey.
Cited by 55% of the respondents as the second most critical issue was low interest rates and capital market returns. However, 52% of the respondents surveyed this year said claims cost inflation was a critical issue.
Looking at the issues facing their own companies, 66% of participants listed maintaining underwriting discipline and price adequacy as the most critical issue facing their company, up from 60% in last year's survey. The fundamentals are very important, and it reflects the competitiveness of the marketplace. Executives know that, given the current environment, the actual underwriting and claims handling really has a lot to do with driving results going forward, noted Kuczinski.
When asked to identify three areas in which they could improve operations, survey respondents listed marketing, strategic focus and policy processing.
Insurance Information Institute President Robert Hartwig offered a state-of-the-industry overview that included, among other things, discussions of current economic conditions, industry financial performance, threats and issues facing P/C insurers over the next few years, and increased industry regulation.
For survey results, visit http://www.munichreamerica.com/pdf/ceort2010_survey.pdf.
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access