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Insurance Execs Want To Get Back To Basics

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NU Online News Service, Dec. 4, 2003, 6:07 p.m. EST – Years of low interest rates and volatility in the stock market have caused senior insurance company executives to shift their focus from asset management back to insurance basics, according to researchers at Deloitte & Touche L.L.P., New York.[@@]

New Deloitte survey results reveal that 79% of insurance executives believe that the insurance industry is overly dependent on healthy investment returns. At the same time, 86% feel improving their core insurance operations is the best route to strong profits.

Outside researchers conducted the survey for Deloitte in August and September.

Eighty senior insurance executives were asked about the key challenges and opportunities faced by insurers in the current economy.

One-third of survey respondents were based in Europe, 28% from the United States and 22% from the Asia-Pacific region.

Most respondents said underwriting and distribution of insurance products are and will continue to be their companies’ core activities.

When asked how they would go about improving the effectiveness of underwriting, respondents said they need better information about risks, more streamlined and integrated information technology services, real-time quoting and issuing systems, and greater use of data-mining techniques.

Few of the executives believe they can look purely to higher premiums to boost business. Only 11% said increasing premiums is the most effective way to boost profits.

In contrast, 76% of the respondents said better cost control is an effective way to improve profits.