Global Insurance Industry

A recent survey has surprisingly shown that many Americans still remain optimistic of the future despite the global economic slowdown.

This bodes well, as having a positive attitude always helps. While there’s a saying that goes like “all good things must come to an end”, it also applies to bad things as well.

A positive outlook will also help businesses make more aggressive strategies that may end the economic crisis faster and spur the world economy to even greater heights. It’s also more productive, because it motivates both individuals groups to be more active towards reviving the financial state of the world - especially since that there seems to be some sort of light ahead of the tunnel.

As opposed to doom bringers and nay sayers, this is really good news indeed.

Industry analysts see more troubled waters ahead and the US government’s stimulus package that is proposed would improve conditions but for how long and how much is left to be seen. Most areas of businesses are forecasting losses for the current year and with employment at 25 year highs, it’s not getting any better. Clients are advised to start early with their renewals so they can take advantage of any effects the stimulus packages promised may have on their premiums.
People are still cautious for with not much cash around, people are keeping their cash at home. Banks have also been hit hard, though they are protected and helped by the government regularly, how long the federal government can support the various markets that are in trouble is still in debate. Many have already felt the cash, managing to keep their homes yet not having enough money to buy food, more so for spending that would be allotted for insurance purposes, just hope the crisis ends soon so everybody can get quick on the road to recovery.

The global economic scene isn’t pretty and many analysts see it getting worse for the years to come. Hailed as the worst economic condition since America’s “Great Depression” it has left many wondering if trust in the financial institution that has so been rocked by intrigue and scandals can again be trusted. Insurance firms closed and other financial institutions following suit gives no reassurance of stability in the system.
Experts would still say that having it is better than nothing, but reliability is the issue for many of the world’s largest providers have declared bankruptcy falling victim to the sub-prime industry problems whose effects have rippled around the world hurting everybody. Insurance is a nice thing to have in times of crisis but choosing a firm that has the ability to weather economic conditions is the hard part.

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All industries are affected by the current crisis being experienced worldwide. Many corporations big and small alike - including the insurance industry, are tightening belts and cutting costs just to stay afloat, not to mention some insurance “giants” who are in the hot seat like the American International Group (AIG) because of some fictitious portfolio deals made a few years back which now caused its investors to lose millions of dollars in dividends (but that is an altogether different story). Some insurance companies however undertook a few steps to combat the effects of the crisis first through the prudent administration of investment portfolios. Their investments are made of high grade bonds which were mostly US treasury securities. Second, they fostered growth by coming up with innovative products tailored to market ( grocery stores, restaurants, auto repair shops, car wash shops and the like) needs. Third, they intensified great customer service by improving marketing support to help their retail agencies especially in its web based transactions. Fourth, they also came up with customer-friendly methods to deal with undesirables and improve the efficiency of their brokers and agents.

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Here are some important tips that can be very helpful when securing a life insurance policy:

• Choose a knowledgeable and trustworthy insurance agent. One that can help identify your needs and life circumstances, to assist you in choosing a life insurance policy which meets your necessities.
• Ask questions. Never be afraid to inquire about things you wanted to know about your insurance.
• Never allow yourself to be a victim of fraud. Check out your chosen agent and his company’s background and license to operate.
• Read your policy from front to back. Be aware of everything in your insurance.
• Be sure to demand a copy of all written communication regarding your insurance policy; Never make payments without asking for a receipt.
• Go over your policy with your agent and have an annual review of it to adapt to any change in your income, lifestyle and needs.

If you’re on the lookout to buy insurance, you might be confused with the different types there are. Two types that will usually crop up is whole life and endowment policies. What’s the difference? Whole life policies are life insurance contracts that will pay you a lump sum only after your death. While endowment policies are life insurance contracts that are designed to pay a lump sum after a specified term. Typical maturities are ten, fifteen or twenty years. Generally, premiums are higher for endowment policies than for whole life. This is because the earlier you get a return of your money, the higher the risk for the insurance company. Also, endowments can be cashed in early or “surrendered”, whereas whole life can only be surrendered after a certain time frame, or not at all. With endowments, moreover, the insurance factor ceases after the lump sum is paid off, while whole life policies are meant to be that exactly, to last until the end of your life.

According to a recent study by insurance.com, premiums for automotive insurance have been on the rise lately. As quoted by the Wall Street Journal, insurance quotes have increased by 3.4% on average during the second quarter of 2008, compared with the previous quarter.

The average quote was $1,893 annually, according to quotes given by 15 insurance companies across the States. Up until recently, auto insurance has been fairly friendly to consumers with flat or declining premium rates for the past few years.

Industry insiders cite rising medical costs and repair bills for the increase in premium rates. This new trend could result in various changes, especially driving habits of insurance holders. Less miles on the road means less likelihood of accidents and having to claim insurance. This is said to be likely to last through 2009.

Earnings are shrinking as business’ profit margins are getting thinner and thinner. The insurance market experiences this too, in face of increasing competition. Therefore, their investment returns begin to shrin. So insurance companies are now looking to sharpen underwriting, cut overhead costs and reduce claims leakage. They are also striving to improve management of risk in their investments, in view of recent financial setbacks, solvency pressures and scandals with governance.

This is a hard-hitter, especially these days when lower insurance premiums are the norm. Competition is, indeed, tough!

Times are definitely more challenging, those queried conceded. Soft market conditions in commercial insurance mean a smaller premium pie overall to finance and fewer clients choosing to pay their falling premiums in installments.

Every New Yorker is guaranteed the right to buy health insurance. New Yorkers cannot be discriminated against because of their health status or age. However, a pre-existing condition waiting period may be imposed on you for up to 12 months if you let your insurance lapse for more than 63 days. You should always make sure you have continuous health insurance coverage in order to avoid such a waiting period.

You have three basic options for obtaining health insurance as an individual other than employer or union plans in New York:

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If you own a commercial establishment or condominium, it would be best to have insurance. Commercial establishments are sure to be filled with various paraphernalia needed to make it operate as one. Included here would be the furniture and equipment and if your business does good, insurance is just like a pinch in the arm.

For condominiums, disasters do not need to occur on your unit alone. If a nearby unit catches fire, it will raze and reach you as well. With that in mind, it is best to get insurance so in case this happens, you can be sure that you covered properly.