Multinational players operate with high underwriting capacity and can analyze multiple risks in multiple geographic regions. Size allows companies to concentrate on profitable lines and to ride out economic cycles. Larger groups can provide a global response not only through insurance products, but by offering financial solutions that complement insured risks. They can retain more business, making it difficult for smaller insurers to affect pricing. Smaller companies can be put on the defensive as they defend market share and niches against larger competitors.
Size alone is no guarantee of success.
Some insurers argue that the trend of selling all lines of products to all people in all countries using multiple distribution channels does not allow for effective controls on returns by client, product, country or distribution method. Higher retentions are possible as French global players spread risks across greater regions and more lines of business. As surplus and reserves increase, only the riskiest business is being ceded to reinsurers. Diversifying business from the French market to investments overseas has lowered costs and improved productivity. Lower costs, in turn, have improved cash flow and profits and made more cash available for investments, higher dividend payments, share buybacks or acquisitions.