Insurance digest

This publication is dedicated to providing thought-provoking insights into some of the key strategic issues facing the insurance industry.

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insurance digest Realising the promise of the MENA market
How International groups can make the most of the rapid growth in the insurance market of the Middle East and North Africa (MENA).


insurance digest All for ‘One’: Turning vision into value
Many insurers have or are about to establish ‘One company’ initiatives as they seek to create a unified corporate vision capable of taking their businesses to the next level. However, the anticipated transformation and boost in share values can often fail to materialise. Drawing on the findings of a new PwC study, David Jessup looks at why some ‘One’ programmes work and others don’t.


insurance digest General Ledger Data Challenges
A critical question common to all financial managers who implemented ERP packages over the past fifteen years was, "What data do I include in my general ledger?" How each of them answered this question had immediate and far-reaching implications on the breadth, depth and cost of financial information that a finance organization provided, as well as on management’s expectations of what its ERP system would do.


insurance digest Ready for the unexpected: Stress testing at the heart of management
The scale of the financial crisis took most banks by surprise, highlighting deficiencies in key aspects of their risk management including their approach to stress and scenario testing (SST). Could insurers be vulnerable to comparably extreme and unexpected scenarios? If so, how can they strengthen their SST to ensure they are aware of the threats and are properly prepared?


insurance digest Claims legal expense cost containment: From short-term gains to sustainable reduction
Insurers and self-insured companies typically find the cost of defending claims to be among their largest line item expense, and they spend billions of dollars annually on claims legal expense. Only by rethinking its approach to cost containment can an insurer achieve meaningful change in its legal claims cost containment programs.


insurance digest Risk management at life insurers: Dynamically managing economic cycles
Although near-term survival is still a pressing issue for many insurers, it is currently the right time for the industry as a whole to revisit its risk management strategies in the wake of the most severe financial crisis in eighty years.


insurance digest Effectively managing change in a challenging economic and regulatory environment
Like other insurance markets throughout the world, Canada has recently seen a great deal of change in a short period of time. In order to respond to this change and anticipate what may happen in the future, insurers have had to rethink business as usual and determine how to succeed in the short, medium and long term.


insurance digest Opportunity vies with uncertainty: Prospects for M&A in the European insurance industry
While market uncertainty continues to hold back deal activity within the European insurance sector, an increasing need for divestment and signs of greater price equilibrium are opening up attractive opportunities for acquisition. Damian Guly, Artur Pikula and Rupert Taylor Rea examine the drivers shaping the European insurance M&A market and the key challenges ahead in securing successful acquisitive growth.


insurance digest Don't waste a good crisis - pull ahead of the competitors
A very different insurance industry landscape is set to emerge from the turmoil of the financial crisis, enabling some insurers to pull ahead from their competitors, while others fall behind. Achim Bauer and Brian Chadwick assess some of the key openings being created by the crisis and how farsighted firms can turn them to their advantage.


insurance digest FASB/IASB Insurance: Project's Building Block 1 and Property & Casualty Claim Liabilities
The joint Financial Accounting Standards Board (FASB, U.S.)/ International Accounting Standards Board (IASB) insurance contracts project is challenging the use of many commonly used approaches to measure property and casualty (P&C) unpaid claim liabilities.


insurance digest Simplifying corporate structures: Reducing costs, creating value, and facilitating the efficient use of capital
With their variety of business strategies and product innovations, financial services organizations often have very complex corporate structures. The mix of regulated operating, distribution, investment, holding and dormant companies – together with various special purpose vehicles – means that few employees fully know the complexity of an enterprise’s legal entity structure.


insurance digest Risk margins: New wine in an old bottle
Risk margins are certainly not a new concept. Though insurance can be viewed in different ways, the essential nature of the business is that policyholders are transferring the risks they could not diversify on their own (or did not want to retain) to an insurance company that is able to pool numerous risks and therefore take advantage of risk diversification.


insurance digest Findings from the PwC North American financial reporting process survey
In order to help insurance company executives benchmark their external and internal reporting processes against industry leading practices, PricewaterhouseCoopers recently conducted a survey examining financial reporting processes at 23 North American life insurers. The survey provides insight into ways that insurers can generate greater efficiencies and focus more on value-added analysis, rather than just production.


insurance digest Realising the full potential of India's opening doors
Further relaxation of India’s foreign ownership laws for insurers, which includes extending permissible foreign holdings to up to 49% and allowing reinsurers to set up branches, will significantly increase the openings for international groups in this rapidly expanding market. However, hurdles remain for companies seeking to make the most of these openings, including entrenched local competition, finding suitable partners and navigating through a complex maze of tax and regulation. Radhakishan Rawal assesses the opportunities and challenges.


insurance digest Approaches to insurer insolvency in the UK and US
Because the vast majority of insurance insolvencies occur in their markets, the United States and the United Kingdom have well established processes for the handling and resolution of insolvent insurers, developed through practical experience of such insolvencies and governed by legislation, custom and practice.


insurance digest Challenges in the resolution of insolvent property and casualty (re)insurers
Insurance companies rarely become insolvent overnight; there is usually a gradual deterioration in solvency over time, which – if identified - provides opportunity for the company’s management or regulators to take corrective action to avoid insolvency.


insurance digest What gets paid gets done: Building rewards into enterprise risk management
Solvency II will provide an important catalyst for the development of enterprise risk management (ERM). Building rewards into the ERM framework will in turn help to instil greater risk awareness in the mindset of the organisation, drive desired behaviour and provide a strong foundation for regulatory compliance. We take a look at how to ensure that business strategy and compensation are aligned in the most effective way.


insurance digest Insurance and the climate change challenge
The credit crisis and subsequent recession has served to remind businesses everywhere of the need to focus on key risks, and to identify emerging risks such as sustainability, which are currently unmanaged. This applies all the more to insurance companies, which have exposure to the full gamut of business diversity and human activity. While the pattern of risk and opportunity is constantly shifting, there are a number of interconnected sustainability "mega-trends" that PwC believes will form the insurance model for years to come.


insurance digest Insurance in Turkey: opportunities and challenges
The Turkish insurance market has experienced a period of significant growth, expanding by nearly 25% in each of the last seven years. While future growth may be moderate, the sector still offers potentially enticing returns. The challenges faced by those building a presence in Turkey are varied, and ahead of Turkey's likely accession to the EU, keeping pace with new regulations, products and distribution channels is essential


insurance digest The future of European insurance supervision
The way the insurance industry is supervised is going to change. Beyond that, certainties are few and far between, although the de Larosière publication does start to make certain outcomes more likely. While the view remains hazy, something substantial is emerging from the gloom with the powers-that-be considering radical changes and wanting them to happen quickly. Staying in touch with the debate, and contributing to it, is key.


insurance digest Getting into shape
After years of expansion, many big, unwieldy insurance groups are now hitting the treadmills with the aim of making their operating structure leaner and meaner. The benefits can be considerable and companies with opportunity to simplify regulatory requirements and operations. It is a response to a rapid period of growth that left many insurance groups operating through a fairly complex corporate structure with a number of subsidiaries and branches operating throughout Europe.


insurance digest Guarding against future mis-selling claims
Compensation claims relating to some unit-linked policies in the Netherlands have once again highlighted the financial and reputational risks of 'mis-selling'. Companies marketing long-term contracts can be especially susceptible to retrospective claims. We look at how a risk-conscious 'lifecycle' approach to design, marketing, sales and after-sales support could help insurers to avoid storing up trouble for the future.