2010 – Another Tough Year for Insurance Firms
Nowadays, for the financial crisis all over the world and the keen competition among insurance firms, property and casualty insurance providers are still in for another tough year, with prices weighed down by a sluggish economy and too much supply. In particular credit insurance, which covers defaults, is still suffering direct fallout from the crisis.
Because the market is still awash with sufficient capacity, the prices look set to remain under pressure. At the same time, perhaps for insurers successfully skirted the worst of the financial downturn and had unusually low payouts for damage claims last year, they are likely to continue offering risk cover at lower prices in a bid to gain or keep market share. Low official interest rates hurt insurers’ return on their main investments.
On the other hand, however, consumers will need to do more for their retirement and healthcare due to the radical restructuring of government pension systems to cope with high public debt. This situation should boost demand for asset management, with consumers expected to seek active investment strategies.
When facing such a tough year, most insurance firms have prepared for the challenge in 2010.
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