Crystal ball and other predictions

It is always very difficult to do any “crystal ball” gazing to predict what will happen in the future. Sometime a better yardstick is to look at a variety of trends derived from various indicators around the globe. These trends usually set the stage for short and long term economic, political and sociological predictions. The positive result of studying trends is that you can not only become better informed in knowing in which sectors of the industry you should invest your money, but also on being able to make good choices when selecting a career.

Our company specializes itself in an interesting aspect of globalization in the insurance-business. This is called Multinational Pooling.

Starting with our own industry – Insurance, where are some of the trends pointing to?
As a result of globalization and deregulation, the Insurance industry has gone through a tremendous transformation over the past decade.

B-net reports that “Deregulation” worldwide is encouraging the emergence of universal financial services organizations, like Zurich Financial Services, to replace stand-alone banks, insurers, and brokerage firms. It is also enabling new and nontraditional players, such as Virgin of the UK, to enter the market. This trend is already affecting Asia where the Malaysian and Singapore industries are classic examples of the deregulatory forces at work. The conference for Emerging Insurance Markets in Kuala Lumpur, Malaysia, earlier this year confirmed this trend will continue. London in a way has ceased to be the center of the euro 19bn global insurance underwriting industry, mainly as a result of the global electronic network which was developed in 2006 by some of the world’s largest brokers.”

The World Insurance Network (WIN) is probably the most ambitious electronic network ever established. In a way it has quickly turned insurance into a truly global operation, with risks and underwriters instantly matched across the world. In the past such a process would normally take weeks to complete, at much higher overheads and premiums.

As we look towards the future we can expect that job growth in this large industry will be limited by corporate downsizing, new technology, and increasing direct mail, telephone, and Internet sales. On the other hand numerous job openings will arise from the need to replace workers who leave or retire. Growing areas of the insurance industry are medical services and health insurance, and its expansion into other financial services, such as securities and mutual funds.

The Economist notes that “Insurance companies are certainly not immune to economic slowdown“. People buy fewer equity-linked savings products in difficult times, for example. But concerns about what lurked on insurers’ balance-sheets have probably been overdone. So far the damage from the credit crunch has been limited: the days when insurance companies could be relied on to be the dumbest guys in the room seem to be over.

Admittedly, America’s AIG got into serious trouble after expanding into the business of insuring mortgage bonds, but Swiss Re was the only other company to dabble in this dangerous niche. By and large only those insurers which own banks, like Germany’s Allianz and ING of the Netherlands, have revealed big exposures to the toxic end of the credit spectrum. And the industry’s disclosure about such assets has tended to be far superior to that of the banks. ING’s last quarterly report was 96 pages long, with a 190-page statistical supplement chucked in for fun.

In June 2009, a forum of Europe’s biggest insurers agreed to implement new Market Consistent Embedded Value (MCEV) rules. These require companies to make uniform assumptions about investment returns and apply the reporting standard across the entire company.

The bottom-line is clear: In the years ahead the Insurance Industry will become more transparent, global and competitive. Consumers will benefit. (source: Sure)

Please contact us for more detailed information about Multinational Pooling.

Information en calculations

English contact form General (Third party) Liability application form Directors and Officers Indemnity Premium Hiscox CyberClear Insurance - premium IT Information Technology Liability - Premium Management Consultancy Liability = premium Pension defined contribution - calculation Audio - Dutch Business risks and insurances Complete list - Dutch Business Insurances