Financial Services

Global insurance: vast potential

The global insurance market is remarkably strong, despite continued fallout from the financial crisis. Low interest rates coupled with relatively poor investment returns have impeded growth, but demand for insurance products and services remains high.

We keep you prepared by providing insights into the nuances of your market, as well as global trends putting pressure on the industry.

Stay nimble amid risk and regulation

Waves of global legislation continue to pressure management and absorb precious resources. Combined with the need to innovate in a highly competitive environment, this is causing some insurers to withdraw from long-standing core markets and product lines.

However, insurers are adapting by leveraging technology and developing operating models that are compliant with Solvency II. New business architectures will enable insurers to release better products more quickly and cheaply.

Gain market insight

The balance of power is shifting toward the customer, and distribution models are rapidly evolving. Emerging markets in Latin America, Asia, Africa and Eastern Europe are future battlegrounds that offer big prizes – but only if insurers can get it right.

Success will be achieved with patience, long-term investment and genuine understanding of local dynamics.


  • Are you ready for Solvency II?

    At the recent Trilogue meeting, the European Commission proposed a deferral of the implementation date of Solvency II to January 1, 2015, but the proposal did not reach consensus.

    Are you ready?


  • Actuarial and risk management strategies

    As the insurance market undergoes radical change, insurance companies face a difficult balancing act. They must identify and assess new options for value creation while continuing to manage risks and meet emerging regulatory requirements such as Solvency II and IFRS.

    The combination of our dedicated actuarial and risk professionals and close partnerships with related practices across EY provides truly integrated services across all disciplines in the insurance industry.

    Explore the service areas below to learn more about our actuarial and risk management expertise.

    • Risk and capital

      As capital becomes scarce and competition from other financial institutions increases, insurers are evolving from static to dynamic optimization of risk portfolios. We help companies optimize their risk portfolios under current rules as well as expected new regulations such as Solvency II.

    • Customer and growth

      The insurance industry faces many challenges: political changes, economics, product innovation, technology advances, competition from other financial sectors and changing customer behaviour. We help companies understand and prepare for these changes by providing practical insights on consumer buying patterns. We also help you understand which customers truly create value in order to enhance high-value relationships.

    • Financial reporting

      The global insurance industry is facing a wave of new regulations and reporting requirements. It is crucial for companies to understand the micro and macro effects of new reporting requirements—the importance of reported figures and the wider implications for strategy and operations. We help companies understand and prepare efficient external and internal reporting frameworks by providing actuarial services that are part of integrated multi-disciplinary solutions.

    • Actuarial transformation and offshoring

      We help companies simplify their actuarial infrastructure and achieve cost efficiency by streamlining or offshoring/outsourcing their actuarial and finance reporting processes.

    • Modelling

      Actuarial and risk models are becoming increasingly crucial to business operations. Although a fast close of actuarial reporting remains important, regulatory focus and requirements to put a robust control environment around models are also increasing. We help companies make their actuarial and risk models efficient and fit for purpose.

    • Audit and Assurance

      Our actuaries work within our audit teams to assess the appropriateness and accuracy of the most critical elements of insurance company financial statements, including the actuarial reserves and other key estimates calculated using specialised actuarial techniques. Actuarial audit activities help reduce the risk of critical errors in financial statements and of inaccurate assessment of the financial risks to which the enterprise is exposed.

    • Asset management

      Asset management is closely linked with capital optimization, product optimization and financial modelling. Facing innovation and competition from other financial sectors, insurers must develop optimal asset management strategies. We help companies with asset liability management, derivative pricing and performance management.

    • Merger and acquisitions

      As companies revisit and optimise their portfolio, they will look to acquire and consolidate more attractive businesses, and dispose of the businesses where they cannot compete. We provide integrated services with our Transaction Advisory team to help companies in valuations and post-merger integration.

  • Be prepared for IFRS/accounting changes

    We are increasingly living in a global economy — with trade and inbound and outbound investment a fact of life. It's no wonder capital markets have long advocated for globally recognized accounting standards.

    Until recently, that common accounting language has been a missing link. Now, policymakers, lawmakers and regulators are working alongside standard-setters to provide a single set of high-quality, global accounting principles.

    Benefit from our timely insights as your prepare for this transition.

  • Customer agenda

    The buying behaviours, attitudes and preferences of insurance customers worldwide are changing. To understand this transformation, insurers need to determine how they must adapt to attract, deepen and preserve customer relationships.

  • Governance facing the industry today

    We, along with Tapestry Network, established the Insurance Governance Leadership Network (IGLN), a global network centered around non-executive directors from a select group of the largest insurers from Europe, North America and Asia. The IGLN provides a peer-to-peer platform for participants to discuss critical issues facing the industry globally. Its primary focus is the non-executive director, but it also engages senior management (notably chief risk officers) and regulators, all of whom are committed to outstanding governance and supervision in support of the mission to build strong, enduring, and trustworthy insurance institutions.

    Tapestry Briefings – A View from the Boardroom:

     

  • Operations and technology: implementing efficiencies

    In recent years, a new generation of technologies has created a renewed appetite amongst insurers for using IT to manage claims more effectively.

    Yet there are still a large number of challenges to be overcome in delivering the anticipated business benefits. Are you achieving the improved claims performance you need from your IT investments?

    Related content

    • Claims transformation

      Our offerings enable transformational or step changes in claims capabilities. Our expertise and analytical insight can help you achieve better claims outcomes and expense management.

    • Policy administration and billing

      Insurers are under constant pressure to reduce underwriting operations costs, while continuing to grow their customer base without increasing headcount. They also face tougher demands from producers and customers who want faster quoting, more accurate policy issuance, diversified billing and payment options and real-time self-service capabilities.

    • Product development and delivery

      Incompatible systems, organizational silos and disjointed processes perpetuate costly and low- quality product development approaches. As a result, many insurers have redundant product portfolios that complicate underwriting, operations and claims processes.

      As insurers look to refresh and expand their products, these issues restrict their ability to react to market changes and satisfy their customers. Product design and delivery architecture are central to innovation and fulfilment across the insurance enterprise, and they must be integrated into both business processes and technology solutions.

      We can help your organization take the following steps to develop a robust suite of products designed for specific customer needs.

    • Underwriting and pricing effectiveness

      Given unrelenting economic uncertainty and prolonged low interest rates, insurers face significant profit- and growth-related pressures and thus must improve the efficiency and effectiveness of their underwriting capabilities.

      One way to improve risk selection and pricing is leveraging data to embrace more sophisticated segmentation. However, success will ultimately depend on adopting enhanced analytical and modelling techniques.

  • The emergence of emerging markets

    The global economy is at a turning point. Fast-growth economies in Asia, the Middle East, Africa, Latin America and Eastern Europe now form almost half of global GDP and, in 2010, they contributed 70% to overall global growth.

    These trends are accelerating. By 2050, fast-growth economies are projected to account for 65% of the global economy. In contrast, most developed markets are still struggling to recover after the global recession. For many businesses, their very survival depends on pursuing a growth agenda. This might include expanding into new markets and sectors, finding new ways to innovate or taking new approaches to talent. But there’s one key question that must be answered: how can your insurance business make the most of the many opportunities that exist?

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