European Insurance Industry could be in trouble without further cost savings and consolidation

European Insurance Industry could be in trouble without further cost savings and consolidation

Studies show that European insurance groups and local insurers are facing increased competition and slowing growth. In addition, because more than 90 percent of local insurers are sub-scale in size and the foreign portfolios of international groups are highly fragmented, mergers and acquisitions are likely to lead to further consolidation of the industry. The motto seems to be that senior management at insurance companies must break the traditional compromise between profitability and growth and create sustainable advantage on both dimensions.