Insurance Equity Analyst Survey | Mercer

Insurance Investment

Insurance Equity Analyst Survey

Insurance companies have been through a period of dramatic change, with increasingly demanding regulatory regimes, a continually challenging investment environment, a flood of external capital into the industry and a need to materially innovate product offerings.

Insurance company boards and senior management have had to make difficult but time-critical decisions to navigate such an environment. However, when making such decisions, it is often a challenge to understand whether the direction chosen is aligned with the needs and objectives of key stakeholders, such as shareholders and policyholders. Mercer and Guy Carpenter partnered to survey equity analysts who help drive these stakeholder objectives.

Insurers should consider stakeholder views in their strategy

This survey polled sell-side and buy-side equity analysts to understand the preferences of shareholders and potential shareholders. Although analyst calls and similar modes of communication provide a limited forum for this sort of exchange, these interactions would not normally be sufficiently deep or frequent enough to influence detailed policies and strategies. Incorporating or at least considering the views of various stakeholders will be critical for insurers in ensuring that they are moving along the right path, especially in this uncertain environment.

Consensus views were noted in the following areas: underwriting exposure, turn of the underwriting cycle, investment risk taking, and primary investment approach. This survey further explores insurance equity valuation and the drivers of performance, underwriting policy, investment policy and market risk, and mergers and acquisitions.

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