ORLANDO, FLA. — The recession may cause some to stumble, but opportunities for growth and improvements in efficiency remain.
Robert Kerzner, president and chief executive officer of the Life Office Management Association, Atlanta, and LIMRA International, Windsor, Conn., delivered that message here at the ACORD LOMA Insurance Systems Forum.
"The world has changed pretty dramatically since we met at this time last year," Kerzner said. "The final quarter of 2008 is something none of us would want to live through again."
Indeed, he noted, life insurance sales fell 14% in the fourth quarter of 2008, and that's the worst figure reported since 1951.The property-casualty industry's net income "fell by a whopping 96.2%" in 2008, Kerzner said.
Thanks to the financial meltdown, "a transformation is under way in this business, and when the dust settles this industry is going to look extremely different," Kerzner said.
"There [are] probably going to be fewer companies, as there no doubt will be consolidation down the line," Kerzner predicted.
However, he added, because of the credit market crunch, the toxic assets on the books of many carriers, the fact that some insurers are taking Troubled Asset Relief Program funds from Washington, and "the game of chicken going on" in terms of who might want to acquire which company and at what price, "the consolidation is not going to happen as quickly as some might expect."
