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Insurance CEOs believe that their products are not discretionary and that car drivers, householders and business owners will continue to require insurance-perhaps even more so in a time of uncertainty.
Changing concerns
A number of paradigms have shifted and insurers are more concerned than the mean about the disruption to capital markets, protectionist tendencies amongst national governments, over-regulation, inflation, availability of key skills, and the inadequacy of basic infrastructure.
Sweeping new changes in legislation
One major change on the horizon in Europe is the possibility of new European Union regulations due in 2012. The "Solvency II" legislation involves sweeping new capital rules for insurers, including the concept of group supervision for companies that have cross-border operations.
The fit will survive
The increased difficulty of doing business will weed out the weakest insurers, and the remaining market participants will occupy stronger positions in the market. Insurers learned valuable lessons from the downturn of 2001-03-balancing short and long term, improving risk management, and cutting exposure to equities. They believe they are on better footing this time around in terms of their overall financial position, and just 39 percent of insurance CEOs say they are currently changing the way they manage risk.
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Joint ventures rise in popularity
Insurance CEOs are also more likely to be looking at joint ventures and strategic alliances as a way to grow their business and build market share than leaders in other industries. There is confidence within some parts of the sector that business and cash flow will remain robust this year, or at least more stable than in other sectors.
Retaining talent
Forty-four percent of insurance CEOs believe that a management structure that rewards long-term success is "critical" for employee retention, compared with 31 percent of companies overall. More than half of insurers say information about employees' views and needs is critical, compared with 38 percent of companies overall.
Related research from PricewaterhouseCoopers
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