Life Insurance: Complex Regulations and Interest Rates are concerns for 2007

A survey was taken among the life insurance CFO's to find out the market trends and the economic environment of the life insurance industry. Many of those surveyed voiced concerns about various factors affecting the industry.

This was the fifteenth survey conducted by Tillinghast, which engaged more than seventy North American life insurance companies and their Chief financial officers.

The focus was on primary challenges facing companies' growth, profit and risk objectives for the coming year. Its focus was also on response to these challenges.

Around seventy seven percent cited growing level and complexity of regulations as their biggest concern. Next issue that rated high on their concerns was potential volatility in rates, this was around seventy percent.

Specific regulatory, tax and legislative challenges concerns were about the scrutiny of risk management practices by the regulatory/rating agency. Many of the CFO's feel that enhancing the ERM is a response that is needed to face the current regulatory, tax and legislative issues.

The survey report has expected a substantial increase in the concentration of market share among the larger companies. Presently there has been a significant increase in the market share with the top 10 life insurance companies garnering around fifty one percent market shares when compared to the 45 -50 percent that was predicted earlier. Some respondents felt that this might grow from fifty one percent to a figure of fifty seven to sixty percent.

Distribution and product performance are still troublesome factors for most CFO's. Many are worried that, prices are not competitive. The issue is that the various life insurance policies marketed do not reach the expected target of sales.

To address economic, expense and distribution concerns the companies are now expanding into new products or markets. The major factor being lack of sales is what is being attributed as the primary obstacle to achieving the company's objectives.

Thus by enlarge the CFO survey has shown disenchantment in the executives towards better prospect in the near future. Their confidence seems to have taken a severe beating compared to what it was two years ago when they were upbeat about the future of life insurance industry.