Like the rest of the marketplace, insurance companies have taken something of a beating during the financial crisis of the past couple of years. Even the companies offering online insurance quotes, which seem to be in better overall shape than some of the other companies, are finding themselves with much lower profits.
The good news, however, is that there may be hope. According to the Wall Street Journal, the growth prospects for insurance companies are on the move upward. A recent study of the insurance marketplace in 159 different countries discovered that premiums decreased by more than a percent in 2009. This was actually good news, as premiums had fallen around 3.6 percent during the previous year.
The study found that the property and casualty insurance area did much better overall in terms of stability than the life insurance area. Life insurance experienced a drop in premiums.
Another trend that’s an overall positive is that more insurance companies returned to profitability last year. This was due, largely, to improved financial markets when compared to 2008.
Whether or not this upward trend will continue remains, of course, to be seen. The insurance industry is still facing some hefty challenges. For example, there is a huge amount of competition for property and casualty insurers. In addition, the growth of premiums is likely to be slow, due to the slow nature of the current recovery. There is also continued pressure on prices. Profitability is still likely to be below average this year.
Life insurance companies face some challenges, too. The low interest rates and the fragile nature of today’s markets means that profitability is lower, and they are also facing a number of regulatory changes. These changes can have a detrimental effect on profitability.
How everything will work out in the end remains to be seen. The good news for consumers is that they’re likely to see even lower online insurance quotes over the coming months.
