Claims News Service, Nov. 17, 1:35 p.m. EST — Five tumultuous years of natural disasters, terrorist attacks, increased regulation and lower investment returns have placed tremendous pressure on the insurance industry. To meet these challenges, the industry will undergo greater change in this decade than it has in a generation, according to industry insiders at the Conference Group’s 17th Annual Executive Conference for the Property-Casualty Insurance Industry.
Many of the issues facing the insurance industry have been headline news. Because of hurricanes, tornadoes and other disasters, most industry analysts agree that property and commercial claims have spiked during the past two years. Hurricanes Katrina, Wilma, and Rita alone have generated catastrophic losses for the U.S. property-casualty industry. Because of the larger dollars at risk and disagreements over coverage, settling these claims could take years, and industry observers also are concerned over speculation that the U.S. could be at risk of increased severe weather activity for a decade or more.
“The property-casualty insurance industry is getting itself into fighting shape through improved practices and risk management techniques,” said Mr. Scheid of PricewaterhouseCoopers. “Insurance companies are responding to financial setbacks and solvency pressures by upgrading underwriting practices and internal control procedures, expanding the use of outsourcing, controlling overhead costs and reducing claims leakage. They also have responded to corporate governance concerns, strengthening market and policyholder confidence.”
The Conference Group’s 17th Annual Executive Conference for the Property-Casualty Industry: “Managing Change in a Dynamic Environment” is being held in New York today and tomorrow, November 17-18, 2005.