Insurance companies are adopting a "bearish" attitude toward economic growth, according to a new report by Deloitte.
Carriers must meet the needs of more price- and service-conscious consumers, prepare for the potential impact of regulatory reform, and make the best use of technology, says the report, "Insurance Industry Outlook: High Hurdles Loom in 2011 & Beyond."
"The bad news is that carriers face fundamental, potentially game-changing developments threatening their ability to achieve top- and bottom-line growth," Rebecca Amoroso, Deloitte LLP vice chairman and U.S. insurance sector leader, said in a media statement. "However, the good news is that insurers also have a number of strategic options and support tools available to improve their chances, not just to survive, but to prosper. Leading-edge carriers are responding proactively to these critical challenges in a variety of ways, employing new policies, practices and products to bolster their operational efficiency and effectiveness."
The Deloitte report says insurance companies can't just maintain the status quo until the economy makes a full recovery, which could take years. They need to experiment and innovate now.
"Overall, insurers remain bearish about the prospects for rapid economic growth in the next year or two," Sam Friedman, who leads Deloitte's insurance sector research, said in a statement. "There are signs of a recovery slowly emerging, albeit with setbacks expected along the way."