Insurance industry growing despite challenges

Insurance industry growing despite challenges

Health and Life insurance companies are engaged in the provision of services to ensure financial protection of individuals in the unforeseen event of a serious medical condition or death. Life insurance is a protection against the income loss which would occur when the insurer passes away while health insurance provides money to the insurer when he/she faced with a serious illness to cope with the expenses of the treatment.
Author: John Hales

Health and Life insurance companies are engaged in the provision of services to ensure financial protection of individuals in the unforeseen event of a serious medical condition or death. Life insurance is a protection against the income loss which would occur when the insurer passes away while health insurance provides money to the insurer when he/she faced with a serious illness to cope with the expenses of the treatment.

The insurance company has a current Market Capitalization of 1,876Billions. In addition the price to earnings ratio of the firm is 20.4. The net profit margin is 3.6% while the price to free cash flow ratio is 21.6. The Return on Equity is 6.6% while the total Debt to Equity ratio is 78.5. The dividend yield of the industry is 2.4%

The global health and life insurance company had been buried in a deep economic and financial mess mostly attributing to the recession which severely affected buying power of consumers and reduced the demand for insurance coverage. With the reduced effects of recession and an increase in the awareness about the importance of insurance, the insurance industry worldwide is recovering from the uncertainty and challenges that it faced earlier on. The presence of a growing market for insurance over the world today coupled with growing opportunities has given the industry a favorable heads up. In the Asia-Pacific region, for example, there is a considerable proportion of a rich and aging population who are demanding insurance and which will provide a huge market to insurance companies.

However, there are still a few serious challenges daunting the insurance industry. The interest rate is quite low which adversely affects the insurance companies. There is also the problem of numerous regulations being imposed on the insurance procedures. These impose additional burdens on insurers which reduces the demand for insurance. .

Furthermore, technology such as the internet facility has empowered consumers as now they are able to research and purchase insurances online. Therefore, this has made the industry more competitive and there is a pressure on them to enhance their performance if they want to increase their market shares. The key lies in speculating and predicting the needs and expectations of buyers from the insurance package he/she is purchasing. In this way, the companies can successfully gain a competitive advantage and fully recover from the economic turmoil that hit them.

Among the companies that are engaged in this endeavor of capturing maximum potential insurers, is the market leader Prudential which has captured the market worth $3495.4 Billion. The follower is Legal & General with market of $1308.6 Billion. The third place is occupied by Standard Life with market share of $927.3 Billion. Finally, the fourth place is captured by old mutual with a market worth $915.4 B. The Travellers company stock performance is also appreciable. The market leader, Prudential has a current stock price of $82.44. For further information on the company’s stock markets, please visit Bidnessetc.com

The Composite Value of the stock is 1135.6 whereas the average change is-0.53%.

Article Source: http://www.articlesbase.com/insurance-articles/insurance-industry-growing-despite-challenges-7035791.html

About the Author

John Hales graduated with a degree in Finance. He is an eclectic personality, with interests ranging from EDM and yoga to cricket. The Financial Brand covers the financial insights and analysis of the Branded companies listed in Dow 30 Indices.