2010 Guide to the US Property & Casualty Industry for Technology Providers (Industry Dynamics)

Introduction

The US P&C insurance industry is being battered on several fronts. Revenue is lower than it was before the financial crisis. The regulatory situation is becoming more burdensome. The 2010 hurricane season may be as active as 2005 when Hurricane Katrina hit. Moreover with the ongoing soft market, P&C insurers do not see any premium revenue lift in the immediate future.

Scope

• US Property & Casualty insurance industry
• This report covers opportunities for technology providers selling to the US P&C insurance industry

Highlights

The market forces impacting the US P&C insurance industry are intensifying. Finding profitable growth is the US P&C insurance industry's greatest challenge.

Technology firms must have a truly differentiated value proposition to get the attention of P&C insurers who are, by nature, slow to replace existing providers or adopt new technology.

Reasons to Purchase

• This research identifies opportunities for technology providers selling to the US P&C insurance industry
• This research provides a primer for technology salespeople unfamiliar with the US P&C insurance industry

Contents

Summary
Catalyst
Ovum View
Key Messages
THE US PROPERTY & CASUALTY INSURANCE INDUSTRY IS CAUTIOUSLY OPTIMISTIC
A high-level view of the multi-billion dollar US P&C insurance industry
P&C insurance is a multi-faceted product
P&C insurers discuss the retail and corporate markets in different terms than L&A insurers
Personal and commercial P&C insurance customers have similar reasons for purchasing coverage
Automobile insurance dominates the total P&C insurance market
P&C insurers generate revenue from customers and investments
P&C insurers use metrics focusing on losses and expenses to get a sense of profitability
The high-level strategic and operational aspects of the P&C insurance industry illustrate the essence of the industry
THE MARKET FORCES IMPACTING THE US P&C INSURANCE INDUSTRY ARE INTENSIFYING
P&C insurers are continually impacted by major market forces
FINDING PROFITABLE GROWTH IS THE P&C INSURANCE INDUSTRY'S GREATEST CHALLENGE
P&C insurance companies have traditionally focused on costs and compliance
The US P&C insurance industry market maps illustrating participants such as policyholders, prospects and producers provide sign posts to profitable growth
TECHNOLOGY IS THE ENGINE THAT ENABLES THE US P&C INSURANCE INDUSTRY
There are six major areas of business opportunities requiring technology support
Each of the business opportunities can be explored for potential technology applications
RECOMMENDATIONS FOR TECHNOLOGY PROVIDERS
Have a truly differentiated value proposition
Realize the differences of the speed of change between the technology and P&C insurance industries
Demonstrate US P&C insurance industry business knowledge
Offer modular solutions or pilots

APPENDIX

Ask the analyst
Definitions
Further reading
Ovum Consulting
Disclaimer

LIST OF FIGURES

Figure 1: Top five countries by P&C direct premiums written, 2008 (US $ billions)
Figure 2: Terms that P&C and L&A insurers use to describe the retail and corporate markets
Figure 3: P&C insurance is sold to both individual and corporate clients
Figure 4: Percent of top five US P&C insurance lines of business, 2008 written premium
Figure 5: Where the P&C insurance company revenue dollar goes, 2008
Figure 6: Three key P&C ratios for the 2004-2009 time period
Figure 7: High-level snapshot of the US P&C insurance industry
Figure 8: The major market forces impacting the US P&C insurance industry
Figure 9: Value of insured coastal properties vulnerable to hurricanes for the top ten states, 2007 ($ billions)
Figure 10: High-level map of the US P&C personal lines insurance market
Figure 11: High-level map of the US P&C commercial lines insurance market
Figure 12: Six major P&C insurance company challenges requiring technology support
Figure 13: Selected potential technology applications for each of the six business opportunity areas
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