Life insurers in the US that
want to survive and thrive must innovate or risk becoming
also-rans, Robert Kerzner, president and CEO of financial industry
organisation Limra told 450 insurance executives at the 2010 Limra
Annual Conference held in Washington DC in late-October.
“Many of the fundamentals of
our business are out of balance,” said Kerzner. “In the animal
kingdom, failure to adapt means extinction. In the same way,
companies need to significantly transform their thinking and adapt
their business models in order to remain competitive.”
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Kerzner noted the life
insurance business environment has become far more challenging in
the wake of the financial crisis.
He outlined factors such as
the low interest rate climate; the increasingly onerous legislative
and regulatory environment; unfavourable interest spreads and
higher operating costs.
These, he said, have led to
greater risks for companies with potentially diminished
rewards.
Kerzner predicted the changes
taking place in areas such as regulatory capital reserve
requirements would contribute to intensified merger and acquisition
activity in the life industry.
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