The insurance industry, in developed markets, is a mature business. As I mentioned in my first post, Accenture’s Insurance 2020 studies, across a range of these markets, forecast that growth and profitability will rise very modestly off current low levels all the way through to 2020.
But that doesn’t mean mediocre performance is inevitable. The biggest advantage of carriers that are determined to achieve high performance is, arguably, the conservatism and built-in inertia of many of their competitors.
Our studies concluded that of the four possible scenarios that will define the insurance market of the future, the most likely is the one characterized by long-term macroeconomic adversity coupled with a willingness of many consumers to pay a premium for more relevant, tailored insurance products and services. At the same time, the demand for simpler, less costly products is also expected to grow.
To get the better of the headwinds that in all likelihood will continue to buffet the industry, we believe there are six key areas which life insurers need to address:
- Product development
- Distribution channel management
- Cost management
- Governance and risk management
In my forthcoming posts I will discuss each of these, together with the steps which I believe carriers should take to master these crucial areas.