By Anthony M. Santomero (auth.), J. David Cummins, Anthony M. Santomero (eds.)
Major demanding situations for all times insurance firms were posed by way of an unparalleled wave of mergers and acquisitions within the assurance and the emergence of non-traditional opponents corresponding to banks, mutual fund businesses and funding advisory enterprises. this is often the 1st publication to research the determinants of multinational functionality within the lifestyles coverage by means of picking out the `best practices' hired by means of major insurers to achieve this dynamic enterprise setting. The publication attracts upon info from insurer monetary statements in addition to upon an intensive survey of lifestyles insurer administration practices and strategic offerings in distribution platforms, details expertise, mergers and acquisitions, human assets and fiscal thoughts. commonplace recommendations resembling expense management, shopper concentration, and product differentiation are analyzed in addition to strategic practices particular to the coverage undefined. top practices are pointed out through measuring the industrial potency of insurers and via evaluating organizations around the undefined. either rate and profit potency are measured relative to most sensible perform effective frontiers including the industry's dominant lifestyles insurance companies. Economies of scale and the consequences of mergers and acquisitions on potency also are analyzed. monetary innovations are tested with particular connection with pricing coverage, valuation of resources and liabilities, and the present country of firm-level possibility administration platforms. The benchmarks tested are the results of wide fieldwork that identifies key monetary dangers and methodologies to either degree and deal with them on the company point.
the implications mentioned within the publication point out that company functionality is considerably correlated with administration practices and strategic offerings. hence, lifestyles insurers can increase profitability by way of adopting optimum mixtures of thoughts. The booklet comprises vital new fabric at the results of strategic offerings in product distribution platforms, info expertise, mergers and acquisitions, human assets, and fiscal hazard administration regulations. within the zone of potency, the technique offers a brand new technique for choosing peer teams of insurers and measuring the functionality of person insurers relative to their peer staff. at the issues of chance and pricing, new insights are provided relative to present methodologies and in regard to components the place development is obviously warranted. The ebook concludes with an research of the long run possibilities and demanding situations within the existence coverage dealing with managers, and the strategic thoughts on hand to them to deal with those changes.
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Extra info for Changes in the Life Insurance Industry: Efficiency, Technology and Risk Management
This is demonstrated further by the heterogeneity within our sample or it is perhaps an implied statement that while leading-edge innovation is not important, constant attention to product refinement is. Distribution channel development ranked as the most important area for 23% of respondents. Combined with the number three choice, improvement of agency productivity emphasizes the critical importance placed on distribution systems. There is stark contrast in the projected directions of these two factors.
Universal life, and variable life and annuities are products that are hybrids of traditional life insurance products and mutual or money-market funds. If these are the products that households truly want, this indicates that there is substantial willingness to bear market risk even when shedding mortality risk. Interestingly, long term care insurance, while not currently a product from which much revenue is derived, is foreseen by a number of insurers as an area of significant growth. This looks to be an area of tremendous opportunity, but also tremendous risk.
Variable Annu~ies --+t- Single A-emium Deferred Annu~ies _Individual Term Life - . - Variable Life ~ _ _ Flexible A-emium Deferred Annu~ies 1999 ---e- Immediate Annuities Relative Importance of Life Insurance Products The first thing to be pointed out is the variety of products that were picked as the most important revenue producer by the sample. No less than 12 of the 15 choices were picked by at least one of the insurers as their leading revenue generator for both 1993 and 1996. For 1999, there were 11 different choices made for most important product.