2003 - SPREAD AND SHARE AT LAST?

(From InsuranceNewslink.com)

2002 was a year of consolidation for property and casualty insurers and reinsurers as they attempted to make the most of the continuing hard market following the 9/11 terrorist attack.Meanwhile, life companies worldwide experienced pain and strain as the stock markets struggled to perform.

With continued terrorism and potential conflict likely in 2003, the aftermath of the US corporate scandals,and the worldwide pensions problem growing, it is difficult to be over optimistic looking forward.

However, we must never forget that insurance is a risk-based business that exists to provide security and peace of mind for its consumers.

With fiercer competition, lower margins, and a plea to move back to basics as investment income drops, merger activity could well increase. Certainly, the regulatory burden is unlikely to reduce with many on solvency watch assisted by no shortage of information from rating agencies.

If there is a bluer sky ahead, it could well be in the more effective use of information technology and the internet. Insurers and brokers alike have been more discerning in 2002 in their IT spend as they look for a quicker return on investment though a measurable impact on the business - an encouraging trend in difficult times.

Research throughout the year has indicated that the internet has survived the bursting of the dot.com bubble and is increasingly being used not just for the streamlining of new business but for a whole range of post-sales applications.