Business Unit: Life
Globalisation, liberalisation, ageing populations: the insurance world is not immune from the effects of social and economic change, and creative solutions to problems are even more necessary to survive in the face of competition. The Divisional Unit: Life underwrites our life reinsurance business worldwide.
What does the consumer need? How can insurance companies position themselves? And how can the reinsurer support them? Take for example private pension provision: in the industrialised nations it is now recognised that state pensions can no longer secure an adequate standard of living. The importance of private provision is steadily increasing in the light of the need for reforms to state pension schemes.
Market influences are changing rapidly
European insurance companies will probably be greatly affected by the new Solvency II regulations. Basically these will focus on making risks more transparent and their control more efficient. Supervisory rules are not only under review in Europe, but also particularly in the USA and various Asian countries. One thing is certain: whatever the detailed provisions of new solvency regulations in the different markets are, risk management for both insurers and reinsurers will become much more important.
Target markets are also changing dramatically: while the customer base is shrinking as a result of demographic developments, life expectancy is increasing. In future, insurance products must be more closely fitted to the specific needs and preferences of the various target groups. On top of that, stronger competition leads to the need for new products, individual service, and an integrated overall strategy.
New markets — New opportunities
In addition to the markets in industrialised countries with their high insurance density, markets in developing countries are becoming increasingly important. The greater part of the world population live in these countries, but these people have so far been inadequately insured or not insured at all. Rapid economic development leads to an increasing need for insurance in such markets as well.
Particularly the booming economies in Asia and Eastern Europe provide potential marketing opportunities for the future. Munich Re recognised this trend at an early stage and has helped markets to establish themselves by providing know-how and capital — above all in China and India. In the rapidly developing markets of the new EU member countries Munich Re has been present for many years — providing products, capacity and infrastructure.
New markets and product innovations create opportunities, but they also bring new challenges for the insurance industry. Against a background of global competition and complex risks, it now needs to strive even more intensively for new solutions — here the key to success lies in strategic partnerships.