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Life insurance industry likely to face changes in 2010Posted On Mon, January 11, 2010
Consumers with life insurance policies may want to keep an eye on their plans for 2010, as Ernst & Young is suggesting that insurers change their business models to make up for decreased earnings and increased regulatory oversight.
Peter R. Porrino, Global Director of Ernst & Young's Insurance Industry Services, said that life insurance companies would likely "continue to face a challenging environment" that required an improvement on many of their goals and objectives.
"By focusing on optimizing capital, broadening out risk management capacity and remaining agile in a constantly evolving regulatory environment, life insurance companies will be more prepared for future crises and better positioned once the market rebounds."
Among the areas that Ernst & Young suggested life insurance companies could work on in 2010 were shifts to a more "back-to-basics" approach, including adjusting to increased regulatory oversights in 2010 designed to improve consumer protection.
It was also suggested that life insurance companies shy away from investing non-traditional capital markets that could take years to recover from the current economic crisis, while also planning more adequately for financial issues that may arise in the future such ad liquidity crises.
Lastly, Ernst & Young stressed cost reductions among insurance companies as they look to "optimize their operations for low-growth employment" that may last for years to come.
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