A new sampling of 115 senior managers at U.S. property/casualty insurers reveals an undercurrent of concern regarding the state of the market.
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Underlying these numbers is a litany of challenges surrounding maintaining profitability, with 80 percent of respondents indicating it is somewhat difficult to very difficult to grow revenue and generate profits for their business in the current market. Respondents credited volatile investment returns, the prolonged soft market conditions and the continued uncertainty of pending government regulations as underlying factors. “Difficult market conditions appear likely to continue,” the report states. “Overall, the ability to grow revenue and generate profits has become more difficult than a year ago.”
The survey also delved into spending expectations for carriers compared to 2010. On the whole, 56 percent of respondents expected to spend moderately more or significantly more on information technology in 2011. Product development and actuarial were the specific areas most cited for investment with 27 percent of respondents indicating that their company expected to spend moderately more or significantly more for the areas this year. Claims administration was also targeted as an area for new investment by 24 percent of respondents.
“Issues related to technology are a constant challenge for companies and the topic continues to rank among the top most common concerns facing insurance company leaders,” the report states. “Among the 16 functions evaluated, only 1 (6 percent) is expected to decrease expenses in 2011 while 14 (88 percent) are expected to increase.”
