Insurance industry weighed down by economic uncertainty
An assessment of the insurance industry highlights the impact of current economic uncertainty on the finances of the sector. The study focuses on European insurers, but many of the finding are common across other markets too. The Reportlinker analysis of Life & Health, Property & Casualty and Multi-Line insurers concluded that the industry is struggling with the volatile macroeconomic environment and regulatory changes while also incorporating changes in technology and business model to be at par with its global peers. Although premiums are increasing, driving revenue higher; profitability is a challenge. Low investment returns, emerging economies and low inflation are all risks to financial stability for the insurance sector. The report calls for greater diversity from firms in order to offset the impact of conditions currently and in the near future.
Tributes paid to insurance grandees
Two veterans of the insurance industry have passed away.
Walter B. Gerken, former chairman and chief executive of Pacific Mutual Life Insurance Co. died last week aged 93. Mr Gerken presided over the company from 1975 to 1986 during which the business grew four-fold and became one of the top 20 insurers. Bloomberg reports that the native New Yorker was also key to building the firm’s investment fund Pimco.
Meanwhile Canadian entrepreneur and philanthropist Paul Johnson died Monday at the age of 86. The Newfoundland businessman became CEO of the family owned Johnson Insurance in 1955 and expanded the company’s Johnson-Unifund Group throughout the country. CBC News reports that the Johnson Family Foundation has donated more than $50 million to various projects. Mr Johnson passed away peacefully at his St. John’s home.
Big data will only get you so far says industry analyst
There’s a lot of talk around the insurance industry, and business generally, about big data. Certainly for the insurance sector the use of deep analytics can transform the way that risks are assessed and premiums set. But tech industry analysts Garter says that there’s little point having the data unless you use it well. “Data is inherently dumb. It doesn’t actually do anything unless you know how to use it; how to act with it,” Peter Sondergaard, head of global research commented. “Products and services will be defined by the sophistication of their algorithms and services. Organizations will be valued, not just on their big data, but the algorithms that turn that data into actions, and ultimately impact customers.”
Mr Sondergaard highlights the opportunity for insurers created by the growing risk from data breaches. He says that it is impossible to stop hackers completely and risk managers are still focused on trying to achieve the perfect protection solution. The insurance industry should gain from the realization of organisations that however much they invest in security they also need to have adequate insurance coverage in place.
