According to findings of a survey released today by global management consulting firm Accenture, nearly two-thirds (62 percent) of insurers plan to grow outside of their home market in the next 12 months.
The survey queried “more than 100 leading life insurers and P/C insurers in 16 of the world’s largest insurance markets to better understand how they envision profitable international expansion in the current economic and financial turmoil,” said the bulletin.
Among the study’s most significant findings were the following:
— 75 percent said they believe that the current economic and financial turmoil will offer more opportunities to grow outside of their home market in the next three years. 77 percent of respondents cited their belief that over the next three years “spreading risks and balancing business cycles” is important. “Managing costs more efficiently” was cited by 74 percent.
— Increased competition is expected in emerging economies. More than eight out of 10 insurers (84 percent) from industrialized countries and nine out of 10 insurers (92 percent) from emerging economies said that emerging markets are a priority for them when expanding outside of their home market.
— Carriers will seek better global integration to manage operations across several countries and/or regions. More than four in five insurers said that, to make their international expansion more efficient, they are currently undertaking or plan to implement changes to their back-office capabilities (cited by 82 percent of respondents) and are implementing or will implement changes to their information technology infrastructure and services (cited by 81 percent).
“Stock-market volatility, changing consumer-buying behaviors and the economic situation are increasing competition and the challenges to achieving profitable growth,” explained Serge Callet, managing director of Accenture’s Insurance practice.
“Having already maximized their domestic footprints, carriers are looking to emerging markets, where premium growth is significantly higher because of catch-up dynamics. However, to generate profitable international expansion, insurers will need to accelerate product innovation, drive new levels of operational efficiency, and increase the simplification and standardization of their internal operations across entire regions. In this context, the execution of a sound expansion strategy will make all the difference.”
Source: Accenture – www.accenture.com
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