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Insurance companies in North America cite their most urgent challenges as product innovation and improving the assessment and pricing of risks. In the face of these challenges, North American insurers recognize the need for change and are actively repositioning their investment portfolios for a new environment. Growth opportunities in this region include improving the cost effectiveness of strategies within their investment portfolio, enhancing data and analytics capabilities, and exploring the viability of outsourcing.
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North American Respondents by Country
2013 State Street Insurance Survey
• This survey, sponsored by State Street and conducted by the Economist Intelligence Unit, examines the current state and future outlook for the global insurance industry
• Fielded during April 2013, the survey encompassed 307 senior insurance executives globally, of which 81 were based in North America
About the Research
1
North American Respondents by Industry Sub-Sector
62%11%
15%
2% 10%
LifeHealthP&CReinsuranceDiversified77%
21%
2%
USCanadaMexico
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Key Challenges Facing Insurers in North America
Managing Risk
Improving the assessment and pricing of risks
Balancing liquidity and reserve adequacy
Regulationand Compliance
Adapting to evolving insurance regulations
Ensuring transparency of business policies and processes
Driving Innovation
Bringing new, innovative products to market quickly
Adapting distribution to changing demographics
Finding New Sources of Value
Effectively allocating capital to the most business-critical priorities
Investing in more complex investment types
Optimizing BusinessStrategy
Converting fixed costs to variable costs
Using data more effectively across our company
51%
65%
62%
46%
51%
62%
52%
64%
57%
54%
42%
21%
25%
32%
43%
21%
32%
22%
32%
23%
Minor challenge Major challengeSource: 2013 State Street Insurance Survey, conducted by The Economist Intelligence Unit 2
Product innovation and improving the assessment and pricing of risks are the most urgent challenges facing North American insurers
33
Improve cost effectiveness of investment strategies
Increase allocation to alternatives
Improve data and analyticscapabilities
Increase portion of general account that is managed externally
Outsource middle or back office functions
62%
58%
51%
38%
25%
25%
33%
20%
20%
28%
Evaluating for action within the next 12 months
Evaluating for longer term action
Evolving Investment Portfolios in North America
Top Five Actions North American Insurers Are Evaluating for Their Investment Portfolios
Source: 2013 State Street Insurance Survey, conducted by The Economist Intelligence Unit CORP-0760 3
• North American insurers see scope to improve the cost effectiveness of the strategies within their investment portfolio, while also showing strong appetite for alternative strategies
• Improving data and analytics capabilities also ranks highly as a priority. Only 10 percent of North American insurers rate their capabilities in this area as “excellent”
• Insurers’ business models are adapting to the new market and regulatory environment, with many insurers exploring the viability of outsourcing
North American insurers recognize the need for change and are actively re-positioning their investment portfolios for a new environment
