Banking Entering Insurance Industry. Banks are entering the insurance industry but many lack the expertise of actually selling insurance. The greatest co-mingling deal as of today is the merger between Citibank and Travelers Insurance. Banks have traditionally been barred from selling insurance. Many industries are affected by the popularity of the internet and the insurance industry is no exception.
Many consumers can search the internet to find the lowest premiums to buy insurance.
Competition is often based on price. There is usually a lag of 12 months between the time a policy is written and the time and insurer earns a full premium and recognizes it as revenue. Losses and loss adjustments expenses are often the largest expense facing an insurer. Therefore, they are a key variable of performance. Insurance companies are susceptible to catastrophic events such as tornados and earthquakes which increases their claims volume.