Insurers can still grow despite a tough economy: Deloitte LLP report

Insurance companies need to break out of a classic, “chicken-and-egg” scenario to generate growth in a tough economy, a Deloitte LLP report says.
The title of the report states its central thesis: 2012 Global Insurance Outlook: Generating growth in a challenging economy takes operational excellence and innovation. But the challenge for insurers is not waiting for the economy to improve before they innovate by adding new products or staff.
The report observes that sovereign debt in euro-zone nations have caused European governments to undertake austerity measures that prevent them from allocating funds to stimulate their stagnating economies. This, in turn, could slow down the U.S. economic recovery, which could impede growth for insurers.
“Such uncertainties have resulted in a classic ‘chicken or the egg’ scenario, with many U.S. companies hesitant to invest in new production capacity or add employees until consumers start spending more enthusiastically again,” the report says. “Yet consumers are hesitant to spend beyond the essentials while the economy – particularly the job and housing markets-remains so weak.
“However, despite these underlying macro-economic conditions, insurers have opportunities to grow if they have the resources and the will to seize the moment.”
Deloitte suggests insurers should focus on the following activities to grow in weak economic conditions:
•Target emerging markets in China, India and Brazil
•Consider growth through mergers and acquisitions
•Enhance distribution options by adding online and mobile sales capability and using analytics to make distribution decisions.
•Adapting to regulatory changes
•Increasing the depth and sophistication of ERM programs
•Winning the war to recruit new talent into the industry
•Developing and introducing new products into the marketplace.