Insurers pressured by rule, market changes.Insurance executives are seeing unprecedented pressure to adjust products and business practices to a widening array of changes, from regulatory uncertainty to rising life expectancy Life Expectancy 1. The age until which a person is expected to live. 2. The remaining number of years an individual is expected to live, based on IRS issued life expectancy tables. to a volatile investment climate. A panel of insurance industry executives discussed their views of what the key issues in insurance are at the inaugural meeting of the World Risk and Insurance Economics Congress in Salt Lake City. Axel Axel: see Absalon. Lehmann, chief executive officer of Zurich North America's commercial operations, said one of his challenges is to balance the interests of Zurich's North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. business with those of the home office. Regulatory and political factors have a significant impact on Zurich's North American operations North American operation Surgical oncology Radical surgery of a 'frozen pelvis', consisting of radical en bloc resection of the uterus and urinary bladder. See 'Frozen pelvis.'. Cf 'All-American' and 'South American' operations. , said Lehmann. "Regulation cannot replace markets, but should support markets," he said. The "twin peaks" of regulation--consumer protection and financial efficiency--should be complementary, but too often are turned against each other by regulatory decisions, he said. Two examples are the European Union's recent effort to ban differences in pricing and underwriting based on gender, and the tendency among U.S. regulators to resist credit-based insurance scoring as an underwriting tool, he said. "Another example is the regulatory transformation of previously accepted practices, such as contingent commissions Contingent commissions is a term used in the American insurance industry for any kind of broker's commission which is contingent upon some event occurring (instead of a commission paid on the sale itself). In the UK this form of payment is known as Overriders. and accounting practices," said Lehmann. David Holland, vice chairman, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Munich America Reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. , said the life insurance industry has "seen a big transformation" in revenue sources over the past quarter century. In 1975, life insurers derived 38% of their revenue from life premiums and 24% from health insurance premiums. In 2003, annuity considerations led the revenue pie with a 37% share. Product Switch The primary sources of revenue for life insurers differ significantly from sources in the mid-1970s. 1975 Life Insurance Premiums 38% Health Insurance Premiums 24% Investment Income 21% Annuity Considerations 13% Other Income 4% 2003 Annuity Considerations 37% Investment Income 25% Life Insurance Premiums 17% Health Insurance Premiums 16% Other Income 5% Note: Table made from pie chart. Source: David Holland, Munich America Reinsurance |
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