A Ward Group survey reveals guarded optimism amidst instability and market uncertainties.
A lingering frustration appears to pervade the life and health industry as difficulties with profits continue amidst an increase in optimism.
In June 2011, 24 senior management members of life, health and annuity insurance operations were surveyed by the Ward Group on long-term challenges and resource allocation, specifically managing expenses under the current economic conditions.
Concern was shown toward growing revenue and profitability, as 54% of respondents indicated difficulties in today’s market resulting from “volatile investment return, an increasingly competitive environment and the continued uncertainty of pending government regulations,” according to the report. This is particularly evident in the health industry, which differed from the life and annuity sectors in indicating an increased difficulty in growing revenue and generating profit in 2011.
But there were signs of optimism overall: 58% of participants thought the life and health industry is better now than a year ago, compared to only 13% who indicated it is worse this year. Also, while expense management was still found to be a concern, it was not emphasized as heavily as last year when compared to other concerns, such as employee efficiency, product competitiveness and product distribution.
These attitudes contrast the findings a similar Ward Group survey conducted with 115 senior managers at U.S. property/casualty insurers, where a sense of pessimism was found increasing when compared to last year.
Customer satisfaction was ranked most important among company goals, followed by profitability. Sixty-three percent of respondents say they expect a year-to-year increase in spend on information technology in 2011. The second strongest response in terms of increased spending, marketing, garnered only 35%.
Justin Stephani writes for Insurance Networking News, a SourceMedia publication.
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