Changes in the Life Insurance Industry: Efficiency, by Anthony M. Santomero (auth.), J. David Cummins, Anthony M.

By Anthony M. Santomero (auth.), J. David Cummins, Anthony M. Santomero (eds.)

Major demanding situations for all times insurance firms were posed via an exceptional wave of mergers and acquisitions within the assurance and the emergence of non-traditional rivals resembling banks, mutual fund businesses and funding advisory agencies. this is often the 1st e-book to investigate the determinants of establishment functionality within the lifestyles assurance via settling on the `best practices' hired via major insurers to achieve this dynamic enterprise surroundings. The e-book attracts upon facts from insurer monetary statements in addition to upon an intensive survey of lifestyles insurer administration practices and strategic offerings in distribution platforms, details expertise, mergers and acquisitions, human assets and monetary ideas. wide-spread suggestions similar to price management, buyer concentration, and product differentiation are analyzed in addition to strategic practices particular to the coverage undefined. top practices are pointed out through measuring the commercial potency of insurers and through evaluating companies around the undefined. either rate and profit potency are measured relative to most sensible perform effective frontiers together with the industry's dominant existence insurance companies. Economies of scale and the results of mergers and acquisitions on potency also are analyzed. monetary recommendations are tested with particular connection with pricing coverage, valuation of resources and liabilities, and the present country of firm-level danger administration structures. The benchmarks demonstrated are the results of vast fieldwork that identifies key monetary hazards and methodologies to either degree and deal with them on the company point.
the implications mentioned within the publication point out that enterprise functionality is considerably correlated with administration practices and strategic offerings. hence, lifestyles insurers can enhance profitability by means of adopting optimum mixtures of recommendations. The ebook comprises vital new fabric at the results of strategic offerings in product distribution platforms, info expertise, mergers and acquisitions, human assets, and monetary danger administration regulations. within the region of potency, the technique presents a brand new procedure for picking out peer teams of insurers and measuring the functionality of person insurers relative to their peer staff. at the themes of possibility and pricing, new insights are provided relative to present methodologies and in regard to parts the place development is obviously warranted. The booklet concludes with an research of the long run possibilities and demanding situations within the existence coverage dealing with managers, and the strategic innovations on hand to them to deal with those changes.

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The majority of the previous work in this field focused on "macro" firm factors.! M. Best or the National Association of Insurance Commissioners (NAIC). Inputs and outputs are taken from these filings and include such factors as premium volume, incurred benefits, assets, reserves, product mix, and various operational costs. Additional factors such as choice of distribution systems and organizational form (mutual or stock) are also included. These measures, while informative, provide an incomplete picture of the insurance operation.

2 This provided an initial set of questions to work from that focused on operational and managerial questions. For additional insight into current industry-specific concerns, the Wharton researchers partnered with Tillinghast Towers-Perrin, a leading consultant to the insurance industry. These inputs, coupled with site visits to pilot participants, served to shape the surveys, develop the questions, and present the issues in appropriate and familiar terms for all of the individual divisions surveyedmarketing, underwriting, claims processing, information technology, and human resources.

62 Rank Mean Rank Percent Ranking no. 7 Mean Rank Percent Ranking no. 6 3 5 4 7 6 Value Added to Company Universal Life Term Life Variable Annuities Ordinary Life Fixed Annuities Variable Life Single Premium Deferred Annuities 401(k) Annuities and Mutual Funds 3 4 5 6 7 8 THE INDUSTRY SPEAKS: RESULTS OF THE WFIC INSURANCE SURVEY 41 variable annuities, universal life, and variable life rank one through three. Interestingly, while there is a clear order in perceived growth, no product clearly dominates as a number one choice.

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