Looking Ahead.

Insurance professionals face myriad trends and economic factors that will change the way they do business this year, including financial-services deregulation, taxation, demutualization, securitization and capitalization. The following articles discuss some of those trends.

* "Mastering the Game." Insurers are up against new, formidable competitors who have less to lose. If they can master 10 issues, they'll be poised to come out ahead.

* "Price It Right." Traditional methods of determining public-offering prices of converting insurance companies have generally not resulted in optimal pricing for the companies or their policyholders. However, there are strategies insurers can pursue to strengthen a perception of fairness and equity in pricing the IPO.

* "Eyes on Demutualization." Regulatory, economic and market dynamics are forcing property/casualty mutuals to take another look at demutualization. Among those clamoring for demutualization will be baby boomer doctors and lawyers, who, as they near retirement, will want to realize a portion of their investment in specialty-line insurers.

* "Capital Ideas." There are several capital-raising alternatives available to small and midsized property/casualty insurers. In addition to issuing surplus notes or creating a downstream holding company, another strategy can be the formation of a strategic alliance than allows a group of insurance companies to share resources to assemble similar or complementary books of business, in essence forming a joint venture without merging legal entities.

* "Redeploying Capital." It is estimated that U.S. property/casualty insurers in aggregate have about 3.5 times the surplus strictly required to underwrite their current volume and mix of business. The amount of capitalization in the property/casualty industry is expected to grow as financial-services deregulation brings more competitors into the market. The challenge is to find the best way to use it.

* "Strategic Tax Planning." As financial services converge, hurdles to achieving the optimum tax position loom larger for the inexperienced. However, the changing landscape presents opportunities for those well-versed in tax strategies.

* "Postcards from the Home Front." Based on the evolution of mortgage securitizations, the capital markets won't have a strong appetite for risky, insurance-backed securities. And that may be a saving grace for the property/casualty industry.

* "All Together Now." Recent events such as the financial difficulties at General American Life Insurance Co. point to the need for insurers to adopt a more holistic approach to risk management that takes into account how the effect of risks in one area can reverberate through an entire organization.