Insurance company financial condition is impacted by more than just paying claims.  Paying claims is the core promise that insurance companies deliver for customers.  From a customer perspective, it is the metric and lens from which it is most common to assess the viability and success of the insurer.

The investor perspective, however, is not viewed just from that single lens.  As noted in the attached report from McKinsey & Company, Creating value, finding focus: Global Insurance Report 2022, 54% of global insurers had an ROE below their cost of equity and about 50% of listed companies consistently trade below book value over the past five years.  Assuming these companies continue to meet the promise of claim paying, why should customers care about these financial headwinds?  What are the drivers and challenges?  What must an insurer do to emerge as a winner and continue to lead the way on that claim paying process?

Claim payments and reserves are the most visible financial metrics in the industry.  However, for insurance company CEOs, those are only the tip of the iceberg.  Drivers and challenges, not unlike any industry also include revenue growth, expense inefficiencies, technology disruptors, cost of capital, return on equity, global connectivity, and talent retention. 

Learn a bit about the economic drivers in the industry and what to look for as insurance companies react to the financial headwinds in this insightful overview.