While most of the European industrial insurance markets are showing very positive signs of recovery, some countries stay in a very soft market due to overcapacity. Considering the historically low interest rates on financial and life Insurance products, companies are currently investing in the non-life industrial market with a higher theoretical return on investment. Nevertheless, in order to develop a profitable industrial insurance portfolio, companies need to invest in Underwriters with outstanding market knowledge and technical skills. Failure to underwrite healthy risks will drastically increase claims exposure and threaten companies’ profitability on the short and middle term.
The growth projections in many countries are clearly optimistic and the major industrial insurance markets are expected to gradually harden in 2014 and 2015. The Property and Casualty lines are stabilising and becoming more profitable due to stricter pricing policies. The market is thus expecting an overall growth in commercial underwriting profits and many players are already investing to reinforce their underwriting departments accordingly. On the contrary, the retail insurance market sees tough competition between companies trying to increase their market share by reducing premium rates.
On a global scale, emerging markets are performing extremely well with a higher profit margin than mature markets on industrial/commercial business lines. Many players are investing to grow and expand their positions in the Asia Pacific and Latin American regions, primarily in Property and Casualty Business.
Solvency II has a significant impact on Underwriters through the increase of their administrative reporting thus decreasing their productivity. It is therefore essential for companies to invest in competitive IT solutions in order to simplify underwriting processes, reduce rekeying tasks and underwriting decision time. Failure to do so will lead to decreased Underwriters productivity and thus a threatened premium growth.
Asquare Partners has built a wide network of Underwriters in all business lines in recent years.