Most life insurer chief financial officers (CFOs) think the economy will be the chief obstacle to meeting company objectives in 2011.
Consultants at Towers Watson & Company, New York (NYSE:TW), come to that conclusion in a report on a survey of 17 life insurer CFOs conducted in August and September.
All but one of the CFOs said the economy will be the biggest roadblock in the coming year, and just 20% of the CFOs said their companies are well-prepared to deal with the slump.
In mid-2008, when Towers Watson last asked CFOs about top challenges, just 77% predicted the economic environment would be a top challenge in 2009.
The percentage of CFOs who said their main economic concerns include interest rates increased to 88% this year, from 55% in 2008, and the percentage who said their main economic concerns include reduced demand due to economic conditions soared to 59%, from 5% in 2008.
Looking to 2011, 54% of the CFOs predicted that overall industry variable annuity sales will increase by at least 4%, and 50% predicted that industry life insurance sales will increase by at least 4%.
Only 23% predicted fixed annuity sales will increase by at least 4%; 62% said they expect to see fixed annuity sales drop.
- Trevor Thomas