Atlas Magazine February 2011

2011, the year of reforms

Insurers are pleased to have withstood the crisis and the bankruptcies that ensued. The past year has been marked by a clear improvement in the results of key players and by the remarkable recovery of the big ailing corporations like AIG.

But no sooner had 2010 gone by than trouble resurfaced. The year 2011 is a source of anguish. Even the most optimistic are cautious. The persistent weakness of the economic and financial environment compounded with many political uncertainties has worried professionals. In its report of January 12, 2011 on the economic prospects the World Bank estimates that the overall growth rate will be of 3.3% in 2011 compared to 3.9% in 2010. Only the Middle East and Africa are likely to report some growth.

In this context characterized by a limited manoeuvre margin, The insurers can only rely on the improvement of their technical management of risks and on the increase of their productivity.

From the governmental side, the year 2011 will be that of regulatory reforms. The expected wave of regulations such as the IFRS standards and Solvency II is of crucial importance in terms of strengthening corporate financial soundness.

In fact, professionals and public authorities are looking for a new economic model for the insurance business. This will happen only through a tough business revision that will require difficult choices from many stakeholders.

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