Atlas Magazine February 2016

The insurance industry, the limits of a system

Going from crisis to crisis, the insurers have been under continuous pressure. Major players on the economic scene, insurers have been caught up at the heart of all upheavals: sub-primes, financial crises, terrorism attacks, wars, natural and man-made catastrophes, global warming,…

As risk mutualization has become a necessity,insurers have found themselves in the frontline everywhere and at all time, engaged in a race against the clock without letup. Understanding complex situations and providing appropriate solutions to them requires know-how and resilience, especially when it comes to sticking to text-book standards, that is to say, carrying out one’s activities by planning for the long-term perspective, selecting risks and pursuing good governance.

But unfortunately, many players are unable to perform their insurer's activity with ease. The influx of capital in the business, unlimited moves of concentrations involving main players, gigantism of risks , the dictatorship of rating agencies and that of return on investment (ROE) have unbalanced the market and set huge tariff competition to which only the most powerful players can stand.

Ever since, numerous insurers, especially those based in emerging countries are struggling to survive. The market has become such a big cartel that the fight is no longer fair for all players.

Atlas Magazine N°128, February 2016

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