Conning Research: Convergence Products Redefine P/C Insurance/Reinsurance

November 29, 2005

“Convergence products” will play a critical part in the competitive landscape of the property-casualty industry in coming years despite being a relatively small segment, according to a new study by Conning Research and Consulting Inc.

“The development of convergence products is indicative of the evolution occurring in risk and capital management to address emerging industry trends,” said Clint Harris, analyst at Conning Research & Consulting. “The key underlying trends are, first, a technology driven movement toward a holistic approach to risk and capital management, second, increased fungibility of capital worldwide, and third, intensifying pressures for the insurance industry to provide return on capital more competitive with other industries. Convergence products or their descendants can have a critical impact on the competitiveness of insurers and reinsurers.”

The Conning Research study, “Evolution in Risk and Capital Management: New Value Propositions for P&C Insurers/Reinsurers,” explores the history of convergence products to date, market forces that are redefining the insurer/reinsurer relationships, the drivers and constraints of convergence products, and the strategic implications of convergence products to the industry.

“The insurance industry’s product development over the last decade has been moving away from individual cause-of-loss coverages and into the more nontraditional products such as multiline loss triggers, post-loss financing, and capital markets financing solutions,” said Stephan Christiansen, director of research at Conning Research & Consulting. “The size of the convergence segment is relatively small, yet the longer term trends in the industry are lining up in favor of these products — and their providers — for the reasons cited in our study. The ability of insurers and reinsurers to respond effectively to the underlying trends with innovation will be a key element in their ability to differentiate and compete in the coming decade.”

“Evolution in Risk and Capital Management: New Value Propositions for P&C Insurers/Reinsurers” is available for purchase from Conning Research & Consulting, Inc., by calling (888) 707-1177 or by visiting the company’s Web site at

Topics Reinsurance Market Property Casualty

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