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Survey: Public Life Insurers Focusing On Consolidation

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NU Online News Service, March 12, 10:33 a.m. – Publicly traded life insurers may be counting more on consolidation than innovation to increase shareholder value, according to Tillinghast-Towers Perrin, New York.

Analysts at the consulting firm conducted an informal survey of executives at stock life companies in the United States and Canada.

Sixty-two percent of the company executives predicted mergers and acquisitions would be one of their company’s top four priorities over the next three years.

But the share who said “growing existing distribution channels” would be a top priority fell to 52%, from 62%, and the share who named “innovating products” as a top priority fell to 38%, from 48%.

Life insurance executives also expressed frustration with Wall Street’s views of their companies.

Seventy-two percent of executives believe their company’s stock is undervalued, and 86% attribute this in part to the insurance industry’s use of complicated accounting and financial practices, Tillinghast says.