This PowerPoint report discusses the five main ways in which the insurance industry has changed in the last quarter century. The first way it has changed is that there is less cyclicity. The second is that it is stronger and more resilient. Global capacity is at or near record highs despite record CATs. However, the report warns that capital accumulation is a double-edged sword. The third way the industry has changed is that it is less dependent on investment income. As a result of an environment of low interest rates and depressed yields, pressure has in turn increased on underwriting, pricing and expenses. The fourth way is that the industry has become more regulated. The global financial crisis spawned the most recent wave of regulation in the U.S. and internationally, including the Dodd-Frank Act, Systemically Important Financial Institutional (SIFI) designations, and international designations such as G-SIIs. Lastly, the industry has changed in that it has become more innovative and nimble with technology risks. The insurance industry, however, is more than able to handle these disruptors including the sharing economy, the Internet of Things, driverless vehicles, drones, climate risk, wearables and more.
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