In many ways, property and casualty insurers are better positioned for sustained growth than in quite some time. As the US economic recovery gains momentum, there will be a surge of insurable exposures in both personal and commercial lines. Yet plenty of challenges remain to keep industry executives on their toes. Discover the bigger picture issues likely to have a significant effect on property and casualty insurer operations in 2015 and beyond. Read the full report here: http://www2.deloitte.com/us/en/pages/financial-services/articles/2015-property-and-casualty-insurance-outlook.html

1. 2015 Property and Casualty Insurance Industry Outlook
Focusing on the bigger picture
In many ways, property and casualty insurers are better positioned for sustained growth than in quite some time. As the US economic recovery gains momentum,
there will be a surge of insurable exposures in both personal and commercial lines. Yet plenty of challenges remain to keep industry executives on their toes. Discover
the bigger picture issues likely to have a significant effect on property and casualty insurer operations in 2015 and beyond.
Achieving information
fluency
Many insurers are not positioned to
capitalize on the vast amount of data
they already have, let alone from new
sources such as auto telematics and
the Internet of Things. Carriers may
want to consider:
• Breaking free of outdated, siloed
data systems
• Establishing a more flexible data
management infrastructure and
governance architecture
• Upgrading their cyber security
systems to take into account all the
new ways data is collected, handled,
and stored
Bottom line: Maintaining information
fluency throughout an insurance
company will be an ongoing journey
rather than a final destination.
Overcoming regulatory
challenges
Insurers can rely on regulatory
uncertainty as an ongoing way of life
rather than a passing conundrum as
multiple overseers — state, federal,
and international — sort out new
standards and rules. P&C insurers will
want to look out for:
• The first Own Risk and Solvency
Assessment filing
• The potential for new group capital
requirements
• The FIO’s examination of the
availability and pricing of auto
insurance in poorer areas
Bottom line: It may be time for
insurers to consider compliance
transformation, to facilitate the
ongoing process of planning for
change, and create value from
mandatory regulatory exercises.
Upgrading capital
management
P&C insurers will need better
frameworks and models to meet
the increasing demands of stakeholders
for more robust stress testing and
scenario planning, as well as to support
growth needs. Carriers may want to
think about:
• How to maintain ROE at a time when
alternative investors are pouring
funds into the business and helping
establish record levels of capacity
• Reviewing the return potential
and pricing of products in light of
persistently low interest rates
• Establishing a more robust internal
risk-adjusted capital framework
that incorporates a multitude
of approaches
Bottom line: A growing number
of insurers will look to follow the
lead of other financial institutions by
implementing an internal risk-adjusted
capital adequacy framework that
accounts for economic as well
as regulatory factors under one
integrated system.
Getting ahead of
climate change
US insurers have generally been slow
to follow the lead of their European
counterparts in addressing how to
mitigate factors likely to spur climate
change and trigger more frequent and
severe weather-related events. Carriers
are primed to become more engaged
on this issue for three reasons:
• Intensifying regulatory and rating
agency scrutiny into how insurers are
accounting for climate change issues
• It is better to prepare for the potential
impact of climate change in case
scientific warnings turn out to be
well-founded
• There is growth potential for insurers
that capitalize on an expancing
market for sustainability-related
products and services
Bottom line: Beyond risk management,
insurers could seize an opportunity
around product innovation, perhaps
even building a brand that resonates
with sustainability-conscious consumers
and businesses.
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