P&C insurers attending 2013 Property Casualty Insurers Association of America Annual Meeting, held in Boston earlier this week, said they have opportunities to grow in 2014.
Guy Carpenter & Co., a global risk and reinsurance specialist and member of Marsh & McLennan Co.’s, conducted a survey at the event and found that one-third of respondents (33 percent) believe that the biggest opportunity to grow their business in 2014 will be through geographic expansion. This is followed by new products (24 percent), which last year was ranked as the top response, and new distribution channels (23 percent). As compared with 2012, respondents in this year’s survey were more than twice as likely (15 percent vs. 7 percent) to cite mergers and acquisitions as the biggest growth opportunity for their business in the year ahead.
Another recent survey from PwC echoes the potential in other global markets, identifying nine select regions, including the Middle East, East Asia and Latin America.
Nearly three out of four respondents (73 percent) of the Guy Carpenter survey said they would be leveraging traditional reinsurance vehicles as a capital source in 2014. This year’s respondents said they were more likely to report utilizing capital markets solutions (18 percent vs. 16 percent respectively) a continuing demonstration of the increase in prevalence and appetite for alternative capital sources and vehicles in the market.
Survey respondents also identified threats to their growth. Undisciplined or unprofitable underwriting is the leading threat to plans for growth in the year ahead, said 35 percent of respondents. Alternatively, with signs of economic improvement and relatively low insured catastrophe losses to date, this year’s respondents were less likely to identify catastrophe/non-catastrophe losses (18 percent vs. 22 percent respectively) and global economic uncertainty (12 percent vs. 19 percent respectively) as the biggest threat to their plans for growth as compared with the 2012 survey. Instead, the industry is placing an increased focus on internal challenges and potential threats, according to Guy Carpenter. In fact, 15 percent of this year’s 115 participants now cite operational inefficiencies as the leading threat to their business, as compared with only six percent in 2012.
Innovation and improvements to technology continue to remain a top priority for insurance professionals. More than one-third (39 percent) of respondents said that if given a blank check to invest in their firm, they would spend the additional resources on bolstering IT, up from 35 percent in 2012. Talent and retention also remains an area of focus for the industry, with 37 percent of respondents commenting that they would allocate a blank check to this area of their business, followed by new products (7 percent).
“One of the most significant opportunities for insurers in a generation is the potential to aggregate and analyze large amounts of data that flow through their own and partners’ networks,” said Andrew Marcell, CEO of US Operations for Guy Carpenter. “Harnessing this information in real-time can be a decisive competitive advantage, enabling carriers to anticipate consumer needs, respond to sudden challenges, accelerate market entry, and optimize profitability over time. We continue to invest in technology-enabled analytical solutions to help our clients realize this potential.”
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