2018 Insurance Industry Outlook

Where do insurers stand as they enter 2018?

As technology innovation, higher customer expectations and disruptive newcomers redefine the marketplace, insurers remain focused on growing top-line sales, bottom-line profitability, addressing challenges, and competing in a dynamic industry. Deloitte's 2018 Insurance Industry Outlook pinpoints key opportunities and threats that should demand attention from insurers over the next 12-to-18 months.

Insurers' hopes for accelerated growth and improved bottom-line profitability were tempered throughout 2017 by the emergence of major speed bumps, both natural and man-made, although there seems to be cautious optimism for improving conditions in the year ahead. Insurers can take advantage of growth opportunities, operational improvement, and expense reduction in 2018 if they can overcome a host of internal and external obstacles standing in their way.  The following are among the options they should consider to potentially improve their top and bottom lines, as well as stay ahead of the competition in the year ahead.

Property-casualty insurers:

  • Overcapitalization, resulting in a soft market outside of auto and property-catastrophe
  • Rising auto loss costs due to expensive new tech and distracted driving
  • Soaring natural catastrophe claims due in part to climate change

Life insurance and annuity:

  • Persistently low interest rates and uncertainty over timing and size of future increases
  • Adaptation to new regulations such as the DOL fiduciary rule for retirement products
  • Outdated application and underwriting process resulting in additional time and cost, and undermining sales
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