Economic conditions for 2012 do not look particularly promising, challenging companies to find unique ways to generate sustainable growth and profitability.  Continued high unemployment, near zero interest rates, limited growth in the economy, increased consumer diversity, extended low investment returns, intensified service expectations, expanded competition, and a probability of additional natural disasters converge to create yet another challenging year for the insurance industry in general. 

Constrained by the combination of these profit-compressing variables with little room to maneuver, earnings are likely to remain low throughout 2012. Despite the low profit projections, strategic plans and a longer-term horizon demand that leadership take action now to be positioned for growth and viability in the future.

The systemic challenge facing the industry hidden amid all these critically relevant and immediate economic, regulatory, and competitive distractions can no longer be found in simplistic product variations and reduced cycle times.  Market diversity, increased options, advances in consumer awareness with easy access to information, and ubiquitous and affordable technology has changed the competitive landscape.