Global Insurance Operating Platforms: Building a Better Mousetrap?
Conning—Careful Execution is the Key to Insurer Success in Pursuit of Global Operating Platforms
--Lloyd’s and Bermuda-based insurers lead in performance
(Hartford, CT) January 28, 2014—Property-casualty insurers and reinsurers continue to build out multi-region and global platforms to access specialty business, but analysis of recent performance highlights some of the pitfalls that may come with poorly executed plans, according to a new study by Conning.
“Concentration of desirable specialty business flowing through major locations, such as London and Bermuda, along with tepid economic growth in mature insurance markets has contributed to insurers’ interest in developing multiple platforms,” said Jerry Theodorou, analyst at Conning. “Many insurers are actively pursuing higher-margin specialty business to combat margin compression from heated competition in standard lines. Pressure on reinsurers’ margins from the influx of alternative capital is also driving many to consider new platforms to access these specialty lines.”
The Conning study, “Global Insurance Operating Platforms: Building a Better Mousetrap?” explores the evolution of the specialty lines model as it relates to expansion via global operating platforms. It includes analysis of a group of 50 representative firms, including U.S. insurers, Bermuda (re)insurers, Lloyd’s companies and European and other global (re)insurers.
“In our analysis of global insurance platforms, we compared insurers on the basis of their global footprint, underwriting results, expenses, capital efficiency, effective tax rates, business mix, and strategies,” said Steve Webersen, director of research at Conning. “While some multi-platform insurers are among the industry’s best performers, we found a large number of execution issues that have contributed to the decline or demise of others. There are many issues for insurers to consider in multi-platform expansion, but execution is the key. Successful insurers are those that bring differentiated competitive offerings, while maintaining excellence in underwriting and careful expense management.”
“Global Insurance Operating Platforms: Building a Better Mousetrap?” is available for purchase from Conning by calling (888) 707-1177 or by visiting the company’s web site at www.conningresearch.com.
Conning (www.conning.com) is a leading investment management company for the global insurance industry, with more than $83 billion in assets under management as of December 31, 2013 through Conning, Inc., Conning Asset Management Limited, Cathay Conning Asset Management Limited, and Goodwin Capital Advisers, Inc. The company's unique combination of asset management, risk and capital management solutions and insurance research helps clients achieve their financial goals through customized business and investment strategies. Founded in 1912, Conning is focused on the future, providing clients with innovative solutions, leveraging its global capabilities, investment experience, and proprietary research. The company is headquartered in Hartford, Connecticut, with additional offices in Purchase, London, Cologne, and Hong Kong.