ATLANTA, Jan. 13 /PRNewswire/ -- Following a challenging 2009, the 2010 forecast for the life insurance industry is cautiously optimistic, according to executives surveyed by LOMA's Resource magazine.
Key decision makers from a cross-section of insurance industry organizations participated in the 2010 forecast. According to participants, the overall economic climate will improve relative to 2009, but not by a large measure.
Most companies are predicting 2010 sales growth, premium growth and profitability to be modest to flat compared to 2009. Profits will be challenged due to variable product guarantees, battered investment portfolios and exceptionally low interest rates. Consumers will get back to the basics of insurance protection and seek low-cost coverage to protect their families. Key inhibitors, however, will be fewer, less wealthy, and much more cautious buyers available for purchasing variable products as well as the changes in fees, features and guarantees many insurers have made in response to the economic crisis, which may compound buyer reluctance to dive back into this market.
Automation technologies that reduce expense, provide faster processing or improve the field and customer experience—workflow, straight through processing and automated underwriting, for example—will continue to take center stage. Insurers also will continue to explore leading edge technologies—such as voice-over-Internet communications, wireless tools, workforce virtualization, smart phones and social media—and if/how they fit into their larger business strategies.
"In 2010, we will begin to see M&A activity intensify in both the U.S. and abroad as highly capitalized companies seek to expand their market share," said Robert Kerzner, president and CEO of LIMRA, LOMA and LL Global. "Regulatory and legislative changes will also have a significant effect on how companies operate. The environment will remain difficult--some companies will thrive while others will struggle."
The 2010 Forecast is published in the January issue of LOMA's Resource magazine. The complete article is on-line at http://www.loma.org/Resource.asp
Established in 1924, with 1,200 plus member companies in over 80 countries, LOMA is committed to a business partnership with its world-wide members in the insurance and financial services industry to improve their management and operations through quality employee development, research, information sharing, and related products and services. To find out more about LOMA and the learning opportunities it offers, visit LOMA's Web site at www.loma.org