The most expensive election in U.S. history is over and for the insurance industry the results appear to be … more of the same. With Barack Obama reelected, continuation of a Republican House and Democratic Senate, and the so-called "fiscal cliff" looming, it looks as if insurers will be facing pretty much the same kinds of challenges as before the elections. The Affordable Care Act will stay in place, meaning health insurers must navigate the transformation of their industry. Dodd-Frank isn't going away, which means stepped up efforts around reporting, risk management and navigation of "too big to fail" definitions. The world hasn't gotten any less risky, as evidenced by the devastation caused by Superstorm Sandy and this week's Nor'easter. And the competitive landscape in financial services continues to be unsettled, with new kinds of competitors and consumer-driven channels creating new opportunities for education, interaction and service.
Official industry statements about the 2012 election results appeared to be mainly conciliatory, holding out hope for a more collaborative and productive environment. For example, Leigh Ann Pusey, president and CEO of the American Insurance Association (AIA), said:
"The 2012 election is now behind us, but important issues lie ahead. Congress and the president must work together in a bipartisan manner to address fiscal cliff issues and bring much needed certainty and sustained growth to our nation's economy. AIA will continue to work with the Obama Administration on issues concerning Dodd-Frank Act (DFA) implementation. AIA maintains the position that property-casualty insurers engaged in regulated insurance activities do not pose a threat to financial stability and should not be regulated like banks. It is imperative that DFA implementation follows congressional intent by addressing gaps while not obstructing competitiveness. AIA continues to engage in all phases of the ongoing regulatory modernization debate in the U.S. and abroad. This discussion remains centered on group supervision, capital adequacy and systemic risk. AIA will work with the Federal Insurance Office to promote international regulatory initiatives that foster coordination, cooperation, and communication, and ultimately result in more efficient and effective regulation that promotes a level competitive playing field and development of private markets."
The American Council of Life Insurers' said:
"The American Council of Life Insurers (ACLI) congratulates President Obama on his re-election and wishes him well in his efforts to lead our country over the next four years. ACLI also extends its congratulations to the candidates for the House and Senate who will be serving in the 113th Congress. This is a challenging time, with many important policy decisions to be made soon. ACLI offers its expertise to the president and Congress particularly in support of public policies that encourage Americans to save more and plan responsibly for their families' long-term financial security."
In other words, insurers must continue to drive efficiency and transactional excellence, and also must step up their games in terms of the all-important trend of customer experience and engagement. The discussion at Insurance & Technology's 14th annual Executive Summit, which took place in California this week, provided encouraging evidence that a growing number of senior-level IT and business executives in insurance recognize how the game is changing. Time will tell whether the political and regulatory climate hinder, help, or have no impact at all on insurers efforts to compete in this new climate.
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio