The ongoing impact of the financial crisis, coupled with the specter of greater governmental oversight, will color the outlook for the life insurance industry in the year ahead, according to New York-based Ernst & Young’s Global Insurance Center 2010 U.S. Outlook.
With investment yields remaining low, insurers should be exploring ways to strengthen prices for in-force as internally-generated sources of capital will be critical, the report contends. In addition to optimizing capital, the report recommends that insurers take steps, including building a more robust risk management capacity, acknowledging a changing regulatory environment and focusing on core businesses.
“In 2010, life insurance executives will continue to face a challenging environment and must focus on improving their current strategies and infrastructures to ensure that they are in line with their business goals and objectives,” Peter Porrino, global director of Ernst & Young’s Insurance Industry Services, said in a statement. “By focusing on optimizing capital, broadening out risk management capacity and remaining agile in a constantly evolving regulatory environment, life insurance companies will be more prepared for future crises and better positioned once the market rebounds.”
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