The State of the Industry

Abstract The new millennium has arrived, bringing with it tougher competitive conditions than most insurance companies would have thought possible a few decades ago. While the state of the industry today is the direct result of the transformation of the overall financial services industry over the past 20 years, its metamorphosis is still in progress. Staggering changes have taken place in the financial services environment during this period. What do these changes mean for insurers, and what will the industry look like 20 years down the road? A brave new world lies before us—a world dominated by the advent of a more financially astute and demanding customer and the power of the Internet. The retail marketplace is being transformed as providers scramble to meet the needs of sophisticated, technology-smart consumers. To reach these consumers, insurance companies must rethink the way they do business, embracing multiple distribution channels and seeking out bold new alliances. The stakes are higher than ever, and companies that remain mired in the past will not be around for long.