The sluggish U.S. economy is just one of the many challenges confronting the life and annuity industry in its pursuit of organic growth, according to “2013 Life Insurance and Annuity Industry Outlook.”
“Insurers face enormous challenges in the year ahead, and not just because the pace and durability of the U.S. economic recovery is uncertain,” said Rebecca Amoroso, Vice Chairman U.S. Insurance Leader Deloitte LLP in the report. “Indeed, for carriers to expand their business and improve their profitability over the long term, they should keep their eyes focused beyond the short-term obstacles they may come across in terms of the business climate.”
Low interest rates are one of the biggest hurdles confronting the industry, forcing carriers to reconsider long-term commitments to policyholders with guaranteed income products. Such economic conditions may make consumers wary about discretionary spending and slow life insurance and annuity growth as they address more immediate financial priorities, such as mortgage, consumer and student debt.
To improve the top and bottom line, Deloitte created a list of issues life insurers and annuity writers must focus on.
Highlights from the report include:
Deloitte said senior executives should begin to assess how these challenges may affect their ability to generate growth and profitability, and added that each issue also is a potential opportunity, depending on the carrier chooses to address the challenge.
“Each course of action has its own risks and rewards, but perhaps the one certainty is that doing nothing is rarely an option,” Deloitte said. “Even carriers that consider themselves successful under their own version of the status quo should evaluate the potential vulnerabilities of their business models in a rapidly evolving economy and insurance marketplace.”
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