PwC report encourages life insurers to adapt to survive

The developing world is where many businesses are turning their eyes to in order increase profits and life insurance is no different. There is a huge potential for growth within these markets most notably, companies are looking to China and India who's GDP has been growing at 9 percent and 4 percent per capita respectively. There are, however, political, regulatory, bureaucratic and cultural hurdles to overcome before a profit can be made. Yoder said, "Some companies have learned this the hard way in recent years. Those markets that from a macroeconomic standpoint look the most attractive do not necessarily fit with a companies' agenda or will give the return that you expect."

While there are substantial opportunities abroad, the overall market for life insurance is decreasing in the developed world most notably in the U.S. and Europe. However, demographic changes in the U.S. are creating opportunities. As the wave of baby boomers reach retirement age, there is a growing market for retirement planning and retirement income products.

The U.S. and Europe are also undergoing changes regarding state support for ageing populations. The Medicare age may rise as a result of fiscal cliff negotiations in the U.S. and cash-strapped European economies are looking to insurers to help fill the gap. Insurers may see challenges mingled with opportunities on this front. In order to play this potentially lucrative role insurers have to cultivate trust with the population. This may prove difficult. Yoder said, "Organizations need to build up the education awareness of the value of their products." Another challenge insurers face with this aspect of the report is that stock-owned carriers may be propelled more by short-term goals more  than establishing a trust with society that will reap benefits and create dividends beyond the next quarter.

The report also makes mention of "Big and fast" business models. With the rapid technological advancements taking place, new players are entering the market, many with business models that have a lower cost structure. "To compete against these companies, traditional insurers need to reinvent their operating models to reduce cost structure, simplify their offerings and organize around customer interactions. Companies will also need to streamline their procedures and recognize their talent to focus on high-growth markets and customized solutions."