The insights and comments provided by insurance industry leaders in the Nolan P&C Executive Survey signal the priorities and strategies that will drive their companies’ actions during these unprecedented times. The responses indicate that company leaders recognize that the industry is rapidly evolving around them. In order to stay competitive, they must aggressively adapt their organizations to a market that is being transformed by technology, changing demographics, innovative product design, and increasing expectations for differentiated service.

The survey results reveal these critical trends and challenges:

  • Gradual economic growth with low interest rates is putting focus on underwriting discipline, loss and loss expense management, retention and growth alternatives
  • Competitive market conditions coupled with favorable pricing trends are emphasizing the question of how much rate is sustainable in the marketplace
  • Managing balance sheet impact is becoming increasingly complex in the face of adverse effects of major catastrophes like “super-storm” Sandy, climate change, and the sting of regulatory interventions requiring forced coverage and non-application of deductibles
  • Rapid advances in multiple technologies are forcing calculated bets and rapid decision-making, leading to implementation challenges and increased demand for capital investments
  • Reductions in claims loss costs and LAE, as well as improvement in reserve management practices, are offsetting low investment returns
  • The complexities of managing “big data” are becoming apparent, driven by text and content mining, telematics detail and increased use of third-party sources
  • “Big data” is converging with predictive modeling and analytics to improve underwriting and claim results, including extensive use in fraud reduction and prevention
  • Social media is being used to better inform underwriting and claims, engage customers, enhance marketing and servicing, and reduce reputational exposure
  • M&A activity is on the rise driven by product line rationalization, targeted national and international expansion and distribution channel expansion
  • Increasing regulatory oversight is a challenge with the impact of IFRS, Solvency II, ORSA, Dodd Frank and FISI
  • Some carriers are pursuing “best in peer group” organizational maturity to respond faster and more effectively to market changes

The senior executives who responded to our survey are cautiously optimistic about their companies and about the industry. They recognize the tumultuous business climate they face today is now the new normal.

Download a copy of our summary report.