Many European insurers are facing tougher times ahead, growth is diminishing and earnings have fallen. Turmoil in financial markets requires different behaviour. Addressing these challenges will require big strides forward, rather than small steps, for many companies.
The articles in this edition address many aspects of the earnings and valuation challenges ahead. Two of the articles are based on discussions with senior industry executives, and the others are by PA's own experts around the world. We hope you enjoy reading it.
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Article summaries
The end of the golden age: rising to the challenge
Even before the liquidity squeeze hit, European insurers were facing tougher times ahead: growth is slowing, earnings are declining and valuations have fallen. Addressing these challenges will require them to make big strides forward, not small steps.
Making pensions cool: new thinking for a new generation
Private pension schemes are sorely needed to plug the UK’s savings gap – but the industry’s advice-led model does not appeal to younger customers. Providers must rethink their approach if they are to win the trust of tomorrow’s customers.
Rethinking customer retention: simulate the market
In the first two parts of our series on customer retention, we identified a number of steps the industry can take to improve customer persistency. But the complexity of the market makes it difficult to make confident predictions about how these might pan out in reality.
Unleashing the Internet: follow the customer
Online sales have boomed in popularity for many retail products – with the insurance industry being a notable exception so far. But customers are not averse to interacting with insurers online, and the cost and customer benefits of Internet-based distribution and communication add up to a strong argument for investment in redesigned products and superior technology.
Indian life insurance: up for grabs
This article explores the challenges presented by the Indian market – and how Indian insurers can learn from the experience of firms in longer-established international markets.
Outsourcing and offshoring: from cost-slicing to customer value creation
The trend towards contracting out services has largely been driven by the promise of reduced costs, but the experience has been mixed and value creation limited. Outsourcing and offshoring still have a valuable role to play. But it requires a seismic shift in attitudes – and a willingness to transform services, rather than simply transplanting them.
The war for talent in insurance: six steps to a happier workplace
Unemployment in many European countries has fallen to its lowest for more than three decades, intensifying the competition for skilled employees and forcing leading companies to rethink their approaches to recruitment. In this article Vibeke de Stricker Borch, Director of Human Resources at PFA Pension in Denmark, shares six ways to create the kind of dynamic workplace that attracts talented employees – and keeps them motivated.
Seeing clearly: putting strategy into practice
Insurance companies expend considerable effort on developing compelling and ambitious strategies to improve performance and create competitive advantage, but many master plans fail to live up to expectations. In this article, we examine how successful organisations overcome ‘strategic sclerosis’ and actually manage to turn strategy into reality.
Rebuilding motor insurance margins: embracing telematics
The value of the European market for car insurance is large, with insurers generating annual premium income of approximately €130 billion by providing cover for some 300 million vehicles. But car insurance profitability is constrained in many markets, and will become so in others, because margins are tight. Therefore the challenge is to leave no stone unturned in the quest to rebuild, or protect, margin. This article indicates how low-cost vehicle telematics may prove a useful tool in some market segments both because they facilitate better risk pricing and because they allow insurers to build customer loyalty.
PA's insurance experts launched this twice-yearly publication to provide senior executives with a selection of insights on topics of significance in the insurance industry.
We hope 'PA perspective on European insurance' gives you an informative and interesting read - and, of course, we welcome your feedback.
To download this edtion, or to contact PA for further information about the topics covered or our services to the insurance sector, please click the link at the top right of this page.
