U.S. insurance industry executives are somewhat optimistic about business conditions, despite ongoing concerns about the economy as a whole, according to an annual survey conducted by KPMG.
More than half (51 percent) of the 300 executives surveyed at KPMGÃ¢â‚¬â„¢s 22nd annual Insurance Industry Conference say that those business conditions most relevant to their businesses have improved.
However, 22 percent predict another downturn-double dip before the economy begins to significantly recover, and 64 percent believe the recovery will not occur until 2012 or later.
Facing this economic environment, only 41 percent of execs surveyed expect their company to perform above expectations next year Ã¢â‚¬“ a decline of 8 percent compared with last yearÃ¢â‚¬â„¢s survey.
Executives surveyed also say improving underwriting profit may be challenging in the next three years. Some 62 percent see only a moderate ability to increase underwriting profit, while more than one-third (34 percent) characterized the chance of increased profit as Ã¢â‚¬Å“weak.Ã¢â‚¬
Asked to identify the most significant challenges they face in the next three to five years, 44 percent of execs cited pricing risk (the risk associated with adequately pricing insurance products) to be the most significant, followed by regulatory/market conduct risk.
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