Is Today the New Normal for the US Insurance Industry?

by Donald Light, October 8, 2010

Abstract

Are current lackluster economic and insurance industry conditions likely to persist for years? If so, this is a new normal, and insurers need to adjust.

In a new report, Is Today the New Normal for the US Insurance Industry?, Celent looks at the factors that have driven insurance industry performance in recent years. If these conditions persist, the industry is facing a new normal. Celent identifies the strategic choices available to insurers in new normal times, and what those choices mean for insurance technology groups.

“If the industry is operating in a new normal environment, then insurers should rethink their corporate objectives and strategies for size and growth, expense control, getting smarter, and solidity and risk management,” says Donald Light, Senior Analyst with Celent’s Insurance Group and author of the report.  “Celent’s prime directive for insurance technology continues to be the context for technology strategy decisions.”

 

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America (Boston)
Erica Ferguson
eferguson@celent.com
Tel.: +1 617 262 8225

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)208 870 7875

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81.3.3500.3023

Table of Contents

Executive Summary

3

Introduction

4

Top Line Metric: The US Insurance Industry Is Getting Smaller

5

Why Has the Industry Been Getting Smaller?

8

Is This Normal?

19

If This Is Normal, Then What?

20

Options for a New Normal IT Strategy

26

Conclusions

27

Leveraging Celent’s Expertise

28

Related Celent Research

29

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