“It’s about core systems, it’s about business intelligence and agent-facing and customer-facing systems.   “We do see some interesting technology adoption trends—server virtualization is more widely adopted than many would think. We also see Software-as-a-Service being used in ancillary areas such as CRM and BI.  But, there are plenty of bread-and-butter issues to be solved before we come up with the next big thing. It’s a very complicated business with very serious problems, and a very serious legacy environment to work with. This report was about bringing out details rather than identifying something new.” – Matthew Josefowicz, director of Novarica and head of the insurance practice

“A few lines, such as directors and officers insurance for financial services, bucked the soft market trend, but generally the insurance market avoided the hard market predictions of earlier in the year.” – Mark Ruquet

This article also covers a recent Web seminar discussing the current  insurance marketplace.

“This recession has made it clear that investment earnings cannot be viewed as a consistently reliable source of significant earnings that insurers traditionally [expect] them to be.  That means they will be motivated to work hard to achieve underwriting profitability and risk appropriate rates.  This will be the biggest challenge for insurers in my opinion, in 2010 as broad based hardening of rates is not expected in the near term.” – Joe McSweeny – president of Marsh’s U.S. and Canada divisions

Steve Weisbart III, chief economist for the Insurance Information Institute offered the opinion that improvements over 2008, were not necessarily the result of good management but a light catastrophe loss year with better improved earnings.

“Those outcomes cannot be expected to continue.  There will be pressure on insurers to achieve underwriting profitability, and a hard market will come, it’s just a question of when.” – Steve Weisbart III – chief economist for the Insurance Information Institute

“Still, the industry is past the point the point of no return on many of their big software initiatives, and budgets are firmly in place to finish them up.  For tech vendors looking to extract additional software dollars out of insurer wallets, it won’t be easy, since even the stock messages about cost shifting and speedy implementation in cloud pitches aren’t translating into additional spend.” – Ellen Carney

“TRUCKER1 goes beyond the idea of helping in a claim situation and focuses on the totality of the trucker’s life.  Leased operators are on the road and away from family a majority of the time, so a social component is important. Combine Facebook, Google Maps, Web services, Internet and e-mail, and you’ve provided a heck of a tool for long-haul truckers.” – Dan Ribar, CIO 1st Guard

This is yet one more example of the bar being raised for insurers – and their technology vendors – to provide value added, anytime/anywhere easy to use applications to their customer base.  And to enable their delivery via lower cost non-proprietary channels.

“The report concluded that insurers are increasingly ‘losing contact with their policyholders. Internet-based communication and mass-mailing techniques have replaced the direct contact that builds healthy customer relationships. From high turnover rates to adversarial relationships, there are hidden costs to this ever-increasing depersonalization.’” – Daniel Hayes

“Florida has less chance of being hit by a hurricane this year, while the coastal segment including North Carolina, South Carolina and Georgia will see heightened storm activity.”  - National Underwriter

 “If you look at the performance of the property and casualty industry versus other financial sectors, it has been a stellar performance” – Joseph Guastella, partner, Insurance Industry, Strategy and Operations, Deloitte

To some extent this is unsurprising as P/C insurers focus more on (and are impacted more) by liability risk versus financial asset risk.  P/C insurers, however, will face challenges in the year’s ahead.

“P/C insurers do have reason to be concerned about the multi-year decline in net premiums written dating back to 2007…as well as the threat of natural catastrophes, which could cause tens of billions of dollars in insured losses.” – insurancenewsnet

“McKinsey concluded that ‘the resulting picture is not a pretty one.’” – Mark Ruquet

 A high level summary of some of the reports findings is included.

“The moribund economy will combine with zero interest rates to deliver a one-two knockout punch to property and casualty insurer bottom lines, with a significant turnaround in rates and premium volume unlikely before next year at the earliest, industry leaders predicted…”. – Sam Friedman

This article contains some excellent quotes from key industry leaders covering interest rate impact, the soft reinsurance market, market stagnation and other factors putting extreme pressure on property casualty insurer’s proftibablities.

An additonal metric rich article about this conference by this same author can be found at Insurers See Flat Premium Growth, Losses Ahead  - (National Underwriter).

“Fifty-one percent said overall industry premium volume would “remain flat” this year, while 36 percent believe premium volume will fall. Only 14 percent expect growth in premiums written in 2010.” – Sam Friedman

“Even as all 15 fraud categories showed increases in activity, more than a third of fraud bureaus reported reductions in their 2009 budgets, and 35 percent reported they were not allowed to fill empty positions.” 

An interesting side-bar to this story and termed “counter-intuitive by the Coalition Against Insurance Fraud is that Workers’ comp fraud committed by employers increased by the least amount.

“At least one large fraud bureau reasoned that insurers may be eager to keep the business during a recession and are working with employers to make ‘premium adjustments,’ rather than reporting them for premium fraud.” – Coalition Against Insurance Fraud