NEW YORK --Even before the full impact of the recent hurricane activity is known, the majority of the 150 senior insurance executives surveyed are less optimistic about premium growth and the industry's ability to increase margins, according to KPMG LLP.
Survey results also reflected that the amount of resources needed to address Sarbanes Oxley compliance was far greater than anticipated a year ago.
While most of the competition is still seen from domestic insurers (51 percent), survey results demonstrate that there is an expectation that competition from international financial-service companies will increase (24 percent).
KPMG LLP, the audit, tax and advisory firm, conducted the real-time survey at its 16th Annual Insurance Industry Conference held at the Hilton New York, on Sept. 27 and 28.
"Overall, companies are cautiously optimistic about the industry," said Fred R. Donner, national sector leader for KPMG's Insurance practice. "However, there was a significant decline in the number of executives who thought that their firm's performance would exceed expectations. I would attribute the loss of confidence to the softening of the property and casualty market and the intense competition in the life sector."
Only 57 percent of the executives surveyed indicated they expect their firms to perform above expectations in the next 12 months, as compared to 70 percent a year ago. The survey also found that the number of executives who indicated that the Sarbanes-Oxley Act has had the greatest impact on the way they do business, increased to 83 percent up from 58 percent last year.
Reflecting the sharpening of underwriting over the past two years, the number of executives indicating that underwriting was the most important for future growth declined to 26 percent from 32 percent a year ago, while customer and product focus both showed increases in importance for future growth.
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