Optimism for the business conditions for the insurance industry in the U.S. is beginning to expire, according to a new report from KPGM, an audit, tax and advisory firm. The report shows that many of the nation’s highest ranking insurance executives are growing pessimistic of the conditions governing the insurance sector. These executives claim that conditions are worse now than they were a year ago and may gradually grow worse as the global economy shows signs of ailing. One of the major challenges facing the industry, notes KPGM, is the changing regulatory landscape that has insurers making major adjustments to the ways they do business.
KPGM surveyed some 350 insurance executives from some of the largest companies in the country during the 23rd Annual Insurance Industry Conference. Of those surveyed, 36% believe that the insurance sector is faced with problems that it will have trouble overcoming. Among these problems is the rising level of fraud, the sluggish pace of new regulations and the potential for a worldwide financial calamity coming from Europe.
The report shows that many insurance executives believe that the market will get worse before it gets better. 58% of those surveyed believe that the economy will not show signs of improvement until at least 2013, which means that insurers will have to weather more financial turmoil before they can expect any good news to come to the market.