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LIMRA's CEO Outlook Index rose for the second quarter in a row, reaching an all-time high of 722 in fourth quarter. This is out of a possible 1,000 points and represents an increase of 15 points since the third quarter.
The index measures the relative optimism of U.S. and Canadian CEOs regarding their companies and the industry at large. LIMRA first tracked the index in second quarter 1999.
While optimism increased over third quarter for both company and industry measures, CEOs continue to be more optimistic about their own company's future than that of the industry as a whole. Last quarter we saw the largest gap ever between the company and industry measures. This quarter the gap widened even further to 225 points, with company measures averaging 834 points and industry measures at 609.
There is an interesting dichotomy this quarter between industry and company results. The statement "The future outlook for my company looks good" received the highest score in the index, a score of 8.83. This is the highest this company-oriented index component ever scored.
At the same time, some of the industry-oriented components received their lowest scores. Specifically, The current economic climate is good for insurance, went down to 7.48, which is its lowest since second quarter 1999 when it scored 7.43. Also the statement, Overall, the industry outlook for the future is bright, went down to 6.93 -- its lowest ever.
The regulatory environment continues to foster uncertainty for the CEO, as well. The index component "The regulatory climate will be friendlier three years from now than it is today" received the highest percent disagreement of all the components -- 34 percent. This was compounded in fourth quarter with the uncertainty of the outcome of the presidential election and the heightened political unsettlement.
A number of CEOs expressed concern with sales levels, profitability, and with the ability to achieve adequate rates of return in the financial services industry. As the consumer demand for life insurance products shift from protection to accumulation, margins will ...
Source: HighBeam Research, LIMRA's CEO Outlook Index: Fourth Quarter, 2000. (ceo outlook).(Brief...