Conning: Group Insurance Lines Outpace Individual

October 28, 2004

Since 1999, group insurance product lines produced greater returns on surplus than the comparable individual lines with very few exceptions, according to a new study by Conning Research and Consulting, Inc. out of Hartford, Conn.

In a five-year period where group insurers were competing to capture what they could of a shrinking supply of business, the expected decline of profits did not materialize. Conning Research found the primary causes were favorable market conditions and group insurers’ quick response to the changing product demands of customers.

“Group insurers have thrived in an increasingly complex product environment over the past five years,” said Terence Martin, analyst at Conning Research & Consulting. “What is interesting is that this has happened at a time when insurers have met employers’ demands for increased product offerings, resulting in an unprecedented increase in administrative complexity.”

The Conning Research & Consulting study, “Group Insurers: Changing Environment; Excellent Returns on Surplus,” dissects the group insurer market by category to seek a better understanding of the product line performance and the impact of product complexity on returns.

“Clearly, group insurers have responded to employer and employee demands for more choice and increased access to customer service and advice,” said Martin. “Their early reaction was to specialize in their offerings, and it worked.”

“Despite the excellent results over the past five-year period, we also found that the future is much less certain,” said Stephan Christiansen, research director at Conning Research & Consulting. “Some of the market conditions that aided that performance were temporary and now under threat. Further, the group insurer segment is fragmenting along product lines, which will increase each insurer’s exposure to market-specific risks.”

“Group Insurers: Changing Environment; Excellent Returns on Surplus” is available r by visiting the company’s Web site at

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