By Max Clarke
The threat of further global economic decline, coupled with declining company profits and a reduced investor confidence, is eroding the profits and credit ratings of the world’s insurance companies, Deloitte have found.
This, coupled with the rise of competition from emerging market including the People's Insurance Company of China, is ushering in an era of ‘enormous and unprecedented change’. This change, as Deloitte’s Kevin Eliott observes, can open up new avenues for operation, helping the UK’s insurers deliver further growth:
“At a time when profits and capital are under pressure, insurers are rightly focusing on strong cost and capital management. These remain areas where many insurers could potentially drive further benefits.”
Further, new regulation in the form of the 2009 EU Solvency II which mandates the level of capital an insurance company must hold, helping them remain solvent for the benefit of the consumer, is compelling insurers to better assess their capital management. This is in turn putting EU insurers in a position to better manage their balance sheets, bosting their efficiency and there for competitiveness on the world stage.