Coming ashore.

It's Business 101. If you want the best opportunity to grow your company, you go where market potential is the greatest, even if it means taking risks and spending a lot of capital. For large European life insurers, that land of opportunity is the United States. With the world's largest economy and a burgeoning population in need of retirement products, the country beckoned seductively. Axa, ING, Aegon and others began buying U.S. life insurers and staking their claims on the U.S. market in the 1980s and '90s.

"If you want to be a worldwide player, you have to have a presence in the United States" explained Gabrielle Matzdorff, chief financial officer of Allianz Life Insurance Company of North America. German insurer Allianz strengthened its presence in the United States in 1999 by purchasing shares it did not already own of LifeUSA Holding Inc. As a result of strong growth in 2004, the United States is now the second-largest life market for Allianz. "It's extremely difficult to build an insurance company from the ground up. You need a strong footprint, so you make an acquisition," Matzdorff said.

For insurance adventurers who came to the United States in the past 20 years, the journey has had difficulties, but the move is paying off for most, as revealed in "The Rediscovery of America" on page 24.

One of the challenges Allianz faced in the U.S. market was building the brand, Matzdorff said. "Allianz was well established in Europe, but at first it wasn't well known in the U.S. We made the decision to leverage the strength of the brand and worked hard at brand building. We've seen a lot of change in recognition," she said.

Also, "there is absolutely a difference in markets and understanding the products," Matzdorff said. "Products that will be successful in one country may not be in another. It depends on what the society's needs are. In Europe, the retirement system is very different. Europe is just now shifting to a need for individual retirement products."

Overall, however, "successful companies are predominantly companies with scale," she said. So don't expect European insurers to rest on their current U.S. acquisitions. "Companies will look to acquisition for future growth. To be a top player takes scale."

Sally Whitney is editor. You may reach her at [phone], Ext. 5340, by writing to A.M. Best Co., Ambest Road, Oldwick, NJ 08858, or by e-mail at [e-mail]. The e-mail address for Best's Review is [e-mail].