The global non-life insurance industry experienced a modest growth in premium volumes during 2011. The global economic slowdown, particularly in Europe, was the primary culprit. Sluggish growth was somewhat offset by the trend of rising premium rates in certain regions and lines of business. Overall, however, industry profitability remained under pressure globally as a result of record losses from catastrophic events in 2011 and a sub-par investment environment. Growth appears uncertain for the near future, as the slowdown in Europe and North America continues to forestall economic growth in Asia-Pacific.
The non-life insurance industry is experiencing both top- and bottom-line pressures. While growth has been slow over the last five years, future growth also seems uncertain. The after-effects of the 2008 global financial crisis, an ongoing economic crisis in Europe, and a continued slow-down in the United States and Asia-Pacific economies have negatively impacted investment income for insurance companies. Because of the global macro reasons noted above as well as sweeping changes in technology, the non-life insurance industry is witnessing shifting trends in the three core functions of the insurance value chain–front office, policy administration and underwriting, and claims.
This paper examines key trends emerging in the policy administration and underwriting function as insurers seek to operate more efficiently and cost-effectively, as well as improve customer service.