P&C companies have weathered the recent economic downturn better than most, owing to the non-discretionary nature of many P&C products and investment portfolios heavily weighted toward short duration fixed income securities. Their Life and Annuity counterparts have had a rougher go of it, for exactly the opposite reasons, though most made at least a partial comeback recently as government actions to inject liquidity into financial markets have taken hold. Agents, brokers, and other intermediaries have performed in line with their markets, though with the solace that comes from providing advice and risk placement/management services rather than assuming risk.

With no major change in outlook for investment income, carriers will need to intensify focus on improving their combined ratios, continuing to emphasize disciplined underwriting, while also pushing hard to drive organizational efficiency. On the revenue side of the equation, the returns will likely come from investments in retention - becoming easier to do business with and developing and rewarding the right channel partners. Additional growth ought to come from targeted, niche-based acquisitions that can be easily integrated with existing operations.

Brokers and agents, facing no immediate relief from the soft market, need to focus on providing value to their customers - building niche expertise that enables tailored services, the right insurance program advice, and preferential market access and pricing. Brokers and larger independent agencies should seek to ramp up acquisitions, as the recognition of no near-term hard market (and the multiple boost that comes with it), combined with a further graying of boomer-owners begins to reduce the bid-ask spread between buyers and sellers.

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Our mission at Bridge is to see to it that our clients prosper under whatever economic conditions exist and outperform their competitors and the industry as a whole. Our insurance practice is focused in three areas:

• Distribution Channel Optimization — Architecting distribution strategies and constructing and managing distribution networks to maximize production
• Cost Management — Managing costs to the lowest level consistent with service and quality objectives
• Technology Strategy & Planning — Using IT to maximum business advantage, setting priorities and investment levels, and optimizing performance

Contact a member of the Bridge Insurance practice About this Topic:

Stuart Gunn

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Pat Leemputte

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Niel Simon

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