Market volatility and declining interest rates now rank among the most challenging obstacles facing insurance companies today. Insurers must respond with agile products and make quick adjustments to existing ones—a tall order without the right tools.
Advanced software solutions can give insurers an important edge. In the coming week, I’ll delve deeper into how the software advantage can help insurers cope with instability. First, let’s look at how volatility and low yields affect product development and refreshes.
The challenges of volatility and yields
According to a GSAM Insurance Asset Management survey, more than half of decision-makers at insurance companies around the globe expect equity market volatility to increase. Even more threatening—falling interest rates. Some of the risks to insurers include:
- Reduced profits
- Lower investment returns
- Asset depreciation
Market events can lead to significant losses for insurance companies. Insurers need to be ready to react. Those that increase their overall agility and responsiveness will be able to gain an upper hand over their lesser competitors.
Join me next week when I’ll look at how an advanced software solution can help.
To learn more, download Responding to the pressures of a volatile insurance marketplace: The advantage of advanced software solutions (pdf; opens in a new window).