Low interest rates will stymie growth in 2013 according to life insurance executives surveyed by LOMA for its 2013 forecast. Modest growth of around three percent is expected.
It has been noted that the life insurance industry must teach itself to adroitly navigate the changes that are on its plate for 2013, many of those within their control albeit the low interest rate environment which will remain until 2014 according to the Federal Reserve.
LOMA, who’s 1,200 member companies across 80 countries undoubtedly have different challenges for the new year, still they rank the low interest rate environment as one of the most challenging.
“In terms of profitability, the industry will continue to be challenged by the low interest rate environment, as compressed margins will continue to present challenges and put pressure on earnings,” according to one senior executive surveyed by LOMA.
Other challenges that executives noted for the coming year include: harnessing data analytics, new technology and solidifying the social media presence; keeping up with the high level of customer service that clients have come to expect from other sectors; and the repercussions of certain carriers exiting certain markets in order to focus on their core earnings.