Going Global

According to Deloitte’s “2012 Global Insurance Outlook,” emerging property/casualty exposures are prompting coverages for cyber liability, green construction, nanotechnology, global political risk and professional liability associated with new regulations.

New personal lines products offer private unemployment insurance, as well as protect homeowners whose home values decline below their mortgage.

In terms of emerging markets, the Deloitte analysts say that with developed economies failing to deliver much growth, insurers may consider entering China, India and Brazil, countries where an expanding middle class could provide growth opportunities.

“Global economic doldrums, low interest rates, persistently high unemployment and a sluggish housing recovery have created challenges for insurers,” said Rebecca Amoroso, Deloitte insurance sector leader.

“Yet even in such uncertain economic times, there are opportunities to generate profitable growth by attracting new customers and growing market share through product development, distribution and marketing reevaluation, and reinventing the customer experience.”

Sam Freidman, Deloitte’s insurance research leader, said achieving growth and innovation in such a difficult economic environment “might be easier said than done” but there are options for insurers to consider.

In addition to coming up with new products and entering new markets, insurers might want to take social media more seriously. The report says insurers have yet to evaluate the impact of their social media efforts and benchmark their work against competitors using analytics.

Insurers can also use analytics to gather cross-selling insights about buyer needs, providing customer relationship management throughout the customer life cycle, according to Deloitte.

Another useful strategy for insurers may be to pursue mergers and acquisitions. Deals in 2011 tended to be niche acquisitions with buyers adding new product lines and distribution channels, and expanding geographic reach into emerging markets, according to the report.

With more carriers undergoing strategic reviews for potential mergers and acquisitions, Deloitte analysts say there is potential for an uptick in bigger deals in 2012, particularly if organic growth remains challenging over the short-to-medium-term.