Experts Reflect on the Insurance Industry in 2010
December 1, 2010 12:00 AM
<b>Experts Reflect on the Insurance Industry in 2010</b>
As the year winds to a close, INN queried analysts and consultants from 10 different firms regarding their thoughts on what the insurance industry did best in 2010.
Don Martelli
<b>Clark Troy, Senior Analyst Aite Group</b>
"What did the insurance industry do right in 2010?" In 2010, the life insurance industry has gotten itself ready to sell to the middle market. By streamlining new business and underwriting processes and introducing products optimized for them, increasing the efficacy of direct marketing and social media strategies through improved data management and analytics, and bolstering traditional channels through recruitment, the industry has gotten itself ready to sell. As consumers emerge from the cave of de-leveraging and assess their retirement and protection needs going forward, life insurers and producers will be prepared to help them.
<b>Eric Andersen, CEO, U.S. Retail Aon Risk Solutions</b>
"What did the insurance industry do right in 2010?" In 2010, the insurance industry made significant strides in analytics development, client education and enterprise risk management. Insurance carriers have stabilized their investment portfolios from the low point in 2008 and, in what is generally an extremely competitive environment, even improved time to market with new products. Insurance brokers also have taken steps to improve their enterprise risk management. In addition, the leading brokers have mined their extensive databases to provide clients with real-time, tailored purchasing and insurer data. Also, brokers have focused on total cost of risk analytics to drive more sophisticated and cost-efficient purchasing and risk management strategies.
<b>Craig Weber, Senior Vice President, Insurance Practice Celent</b>
"What did the insurance industry do right in 2010?" First, there was very little over-reacting to some fairly dismal market conditions. Most companies seemed to take the short-term, bad economic news in stride, which is good in an industry that is based on long-term assumptions. Second, our industry made good progress on its technology refresh efforts. Companies that were mid-stream with platform replacements kept going, and a lot of companies that are not yet underway with core systems improvements finally got the bus rolling. Finally, I think most insurers have done a good job retaining the in-house resources they need to be successful, people with strong business knowledge and the willingness to evolve with changing market conditions.
<b>Anand Rao, Principal PwCs Diamond Advisory Services</b>
"What did the insurance industry do right in 2010?" The industry did four key things right in 2010: 1. The strong grew stronger with more acquisitions, and the weak came out of the ICU and into rehabilitation. The life sector and mutual companies did especially well. The P&C sector got out of the worst of the financial crisis with improving prices, especially in personal lines, and improved policyholder surplus. 2. Players with significant capital looked for growth opportunities globally as well as in new markets (e.g., MetLife acquisition of ALICO). 3. Both P&C and life insurers started their experimentation with social media and mobile technologies, but are still exploring different business models within insurance. 4. Large-scale investments in technology transformation, improved distribution and understanding the consumer.
<b>Ellen Carney, Senior Analyst Forrester Research Inc.</b>
"What did the insurance industry do right in 2010?" In 2010, insurance carriers developed heartier appetites for business innovation. When polled about the IT management priorities of insurers in the U.S. and Canada this year, business innovation topped the list. Nearly 90% of respondents indicated that improving IT's ability and capacity to grow the business was a critical or high priority to their organizations. Along with survey data, that innovation interest also was expressed in the number of Forrester inquiries that came from formalized innovation groups, either within the business or IT (and sometimes they even collaborated!) The hunger is not surprising since, along with introducing more consumer tech into their businesses, the face of insurance is getting younger and fresher with Progressive's Flo getting some competition from State Farm's new stylish male counterpart.
<b>Mark Gorman, CEO and Founder The Gorman Group</b>
"What did the insurance industry do right in 2010?" I see three operational factors that have influenced 2010: 1. A forecasted increase of up to 2% in industry net written premiums reverses two years of market-wide revenue decreases. 2. Improvements in core system functionality that increased organizational agility in navigating current market conditions. 3. An increased investment inand commitment tofact based or data-based decision-making. This movement no longer focuses just on pricing precision, but a wider application of business analytics on both core functional processes and strategic decision-making. However, what has impressed me most in 2010 is the ongoing commitment to doing bu