While the global insurance industry has been less impacted by the financial crisis, it is still facing the need to reconsider the cornerstones of its business. Capital and risk management have been challenged by volatile asset values and increasing regulatory intervention. This has resulted in an unprecedented need for the industry to refocus upon and find a balance between these key elements.
Frank Ellenbürger artner and Global ector Leader, nsurance G in Germany
hile the global insurance industry has been less impacted by the financial crisis, it is still facing the need to reconsider the cornerstones of its business apital and risk management have been challenged by volatile asset values and increasing regulatory intervention his has resulted in an unprecedented need for the industry to refocus upon and find a balance beteen these key elements n conversations ith our member firms’ clients and colleagues around the orld, it is clear that many institutions are no considering their strategic options as they adapt to the ne landscape and increasingly regulated environment o hen undertaking this second of a to-part global survey ith the conomist ntelligence nit, e decided to delve deeper into the themes discussed in A glimmer of hope – the predecessor to this report he first report looked retrospectively at the key elements of capital and risk management and their impact on survival and groth post financial crisis n this survey, e asked respondents of this survey to look to the future o consider the challenges that the industry ill face in the net fe years - particularly capital management, the rising importance of the risk function, the increasing interdependency beteen these to disciplines, along ith groing regulatory changes in and impact upon the industry s the title of this report suggests, Getting the balance right beteen these elements has become even more challenging post financial crisis and ill remain a key focus for the industry ould therefore urge you to read this timely report and, as alays, my insurance colleagues and ould elcome the opportunity to discuss the key issues and conclusions as you adapt to today’s challenging environment
PM eitorial boar an oentar ontributors Paul Bishop G in the Martin an enseen G in the Netherlands uub Arense G in the Netherlands ar Reaer G in the ai hite G in the ann Clark G in the Frank Ellenbürger G in Germany
n une 2009, G nternational launched A glimmer of hope , the first of a to-part global insurance survey series hich it commissioned the conomist ntelligence nit to undertake on its behalf his follo-up report analyes the findings of the second survey undertaken in ugust 2009, eamining ho the financial crisis is changing the attitude of the global insurance industry to risk and capital management – highlighting some of the key issues that these institutions should address in response ur foremost thanks go to the 92 global respondents from different countries ho ansered the survey uestionnaire and the eecutives ho gave their time for intervies e ould also like to thank members of the editorial board and our proect team ho have helped us carry out this research, as ell as the analyst team
PM proet tea Li hite G in the Aber Steart G in the Freie ospeales G in the Arian Curtis G in the Rob Mithell nalyst, conomist ntelligence nit
espondents by geography bout the survey ased in sia acific ntroduction 1 ecutive summary ased in urope 01 uestion of capital 2 02 trengthening risk and capital management ased in North merica onclusion ased in the iddle ast and frica G hough t leadership ontacts
n ugust and eptember 2009, the conomist ntelligence nit surveyed, on behalf of G nternational, 92 senior eecutives from insurance companies around the orld he survey returned to the themes of risk and capital management reflected upon in A glimmer of hope , published in une 2009, hich as the first of a to-phased global insurance thought leadership series his second survey sought to gauge the industry’s outlook around these themes, as ell as their prospects around business performance, groth and regulation espondents ere spread globally, ith percent from sia-acific, 1 percent from urope, 2 percent from North merica and percent from the rest of the orld pproimately percent of respondents represented businesses ith annual revenues in ecess of 00m ore than 0 percent of respondents ere -level or board-level eecutives, and the vast maority had responsibility for finance, risk or general management espondents ere split among life insurance percent, non-life insurance percent and reinsurance percent companies or divisions
bout the survey
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1 A glimmer of hope: Growth prospects in the global insurance industry and the escalation of risk and capital management , G nternational, une 2009
olloing the collapse of Lehman rothers in eptember 200, the ripples from the global financial crisis continue to be felt lthough there is marked variation across financial services, the insurance industry has eathered the storm relatively ell – and certainly emerges from the crisis in a better shape than its close relatives, the banks here are numerous reasons hy the insurance industry has fared relatively ell it typically has a longer-term, more conservative vie of its business than banks it has a longstanding history of managing risks retains relatively strong balance sheets and, although there are notable eceptions, it has not strayed from its core business into more eotic, and risky, financial instruments hile the industry should deservedly breathe a small sigh of relief, this is no time for complacency he coming years ill bring a hole host of challenges and problems ore markets in developed countries are mature, if not saturated, hile emerging markets, here there has historically
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espondents by sector Life insurance Non-life insurance einsurance