The steady decline of state pensions and health care in countries such as the United Kingdom, Italy and the Nordics, the impact of a single European market and currency and the privatization of state monopolies in the world s two most populated countries China and India all contribute to an erosion of economic barriers and the opening of new markets. The encroachment of foreign companies into previously protected domestic markets and competition from the Internet-generation companies and other industries, such as banking, are forcing insurers to take a good look at their global marketing strategies. Today s insurance executive must determine the path to retain and increase competitive advantage. The first place to look is at one s own operation business processes, information systems and technology infrastructure. In the developing e-business world, the ability to rapidly introduce new channels that provide better service to customers or reach untapped markets is easier than ever before.
Traditional insurers face significant inhibitors.
They need to maintain their relationships with channel partners, such as agents, to maintain customer contact. Operational costs are relatively fixed, and internal systems that were once state of the art cannot respond fast enough to play in a competitive market environment. The other major threat is from aggressive competitors, such as banks, which typically have stronger customer relationships, better channel presence and a broader range of financial-services products than insurers. Large financial-services conglomerates, such as Citigroup and Zurich Financial Services Group, are using mergers and acquisitions to improve their economies of scale and to exploit strong global brand identity. Customer loyalty .