Increased regulation will be positive for the industry, say insurance execs surveyed by KPMG
28.01.2010Company: KPMG Česká republika, s.r.o.
Insurance executives indicate that increased regulation will create a stronger, more stable industry, according to the second of a two-part survey the Economist Intelligence Unit undertook for KPMG International. However, respondents also cite it as the biggest barrier to growth over the next three years.
Following is an overview of the survey’s other key findings:
- Performance and growth prospects
- Performance of insurance companies over the last 12 months has been mixed, with 33 percent saying that their business performed better than expected, 25 percent saying it performed as expected and 42 percent, worse than expected.
- When asked about their company’s growth prospects across eight measures up until 2012, the areas around which executives are most positive are premium volume (say 49 percent), organic growth (say 46 percent), and capital reserves (45 percent).
- Compared with the challenging last 12 months, 77 percent of executives expect their business to perform better by 2012, with 18 percent of those expecting much better performance. Only four percent are expecting worse performance.
- Geographically, most growth for the industry is expected in the emerging markets of China and East Asia (say 47 percent) and India and South Asia (say 33 percent). Poorest growth is expected in the UK, Northern Ireland, Australia and New Zealand.
- Aside from increasing regulatory intervention, respondents see other key barriers to growth as generally poor macroeconomic prospects (say 34 percent), new sources of competition (say 32 percent), scarcity and high cost of capital (say 31 percent); higher capital requirements and increased operating costs (say 30 percent); and a decline in consumer confidence (say 29 percent). Respondents were asked to cite up to three options out of ten available.
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