This year brought a number of proposed regulatory changes for the insurance industry, as well as a significant number of claims from Hurricanes Irene and Sandy, a string of wildfires and other natural disasters that occurred throughout the United States. In response, the property-casualty sector is preparing to continue evolving their growth strategies in 2013 to make themselves as efficient as possible and lower their level of risk, according to a new study.
Accounting firm Ernst & Young released the results of its Global Insurance Center U.S. Property-Casualty Outlook report which revealed that acquisitions, international expansion and new products will be core aspects of most insurers' growth plans. The company noted that these strategies, coupled with traditional insurance marketing tactics, will be executed by the nation's largest insurers to stay competitive in an evolving industry.
In particular, acquisitions were predicted to be more common following the new year, namely because it enables insurers to easily expand into new locations and product markets. This diversification may also make them more attractive to customers they did not previously service due to limited product and service offerings. While acquisition has long been a cost-effective strategy for expanding their customer bases, the report notes that large insurers are likely to expand their boundaries into Asian and Latin American markets as well.
Insurers consider 'big data' in their growth initiatives
The words "big data" have been thrown around in nearly every industry as businesses seek to integrate their information to the fullest extent. As property insurers aim to take a bigger stake in the market and beat out their competitors, it's likely that they will adopt big data technology and take ownership of all operations from start to finish, the report notes. However, the authors also say that managing extensive volumes of information will require insurers to retain highly-skilled talent that can carry out each process of analyzing the data effectively.
"Outperforming competitors will require insurers to maximize customer profitability and persistency by continuing to invest in infrastructure, systems, intellectual capital and technology," said David Hollander, global insurance advisory leader at Ernst & Young. "Insurance carriers can seize growth opportunities by improving analytical and decision-making capabilities, cross-selling products and using marketing data to increase customer retention and encourage business expansion. Growth and profitability strategies need to be developed across the enterprise and balanced against the risks they may produce."
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