Report examines how insurers can drive positive economic behavior while protecting society from risk
LONDON, February 12, 2013 — Ongoing macroeconomic uncertainty, proposed tough new regulatory regimes and risk of contagion are the biggest long-term challenges facing insurers around the world, according to a new Economist Intelligence Unit (EIU) study sponsored by BNY Mellon, the global leader in investment management and investment services.
As a result insurers are rethinking business processes and product ranges in order to remain competitive under new risk-based capital regimes, to meet the evolving needs of their customer base and to continue to play a beneficial role in the economy and broader society over the next two decades.
The key findings of the study – Insurers & society: Challenges and opportunities in the period to 2030 – include:
Paul Traynor, Head of Insurance for Europe, Middle East & Africa at BNY Mellon, said: "If, as the study suggests, insurers believe their core competence of turning financial risk into reliable income streams is being undermined by regulation, then we are at risk of a vicious circle developing in which individuals underinvest for their future and are forced to rely on the government. In turn, governments who cannot afford to bear the burden attempt to meet the shortfall, pushing up their sovereign debt to unsustainable levels. This then undermines proposed solvency regulation, which encourages insurers to hold government bonds as these are considered 'risk free'."
Monica Woodley, Managing Editor at the Economist Intelligence Unit, said: "While market stability and consumer protection are important goals, regulators and policymakers should not lose sight of the vital role the insurance industry plays in helping households and companies to reduce risk and save for the future. Limiting the insurance industry's ability to transform risk will have serious ramifications for future generations, leaving consumers under-insured and without inadequate private savings and pensions."
The Economist Intelligence Unit surveyed 332 companies around the world including insurers, reinsurers, wealth managers and independent financial advisers to find out what immediate and long-term challenges the insurance industry faces and how insurers are responding, as well as to explore ways in which the industry will develop in the future.
A copy of the full report can be found at http://www.bnymellon.com/foresight/pdf/eiu-insurance-0213.pdf
BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 36 countries and more than 100 markets. As of December 31, 2012, BNY Mellon had $26.7 trillion in assets under custody and administration, and $1.4 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com, or follow us on Twitter @BNYMellon.
This press release is issued by The Bank of New York Mellon to members of the financial press and media. All information and figures source BNY Mellon unless otherwise stated as at December 31, 2012. The Bank of New York Mellon, London Branch, registered in England and Wales with FC005522 and BR000818. Branch office: One Canada Square, London E14 5AL. Authorised and regulated in the UK by the Financial Services Authority.