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But insurance buyers at multinational companies will be encouraged by news that insurers worldwide are targeting such moves to compensate for sluggish demand in domestic markets. According to the survey conducted by The Economist Intelligence Unit on behalf of financial investment firm State Street Corp, 82 per cent of insurance executives worldwide concede that driving expansion into new geographical markets is a challenge for their companies. Some 27 per cent say it is a major challenge. 31 per cent said the creation of global platforms is a major difficulty, as opposed to just 11 per cent who don't see this as a major problem.
Insurers are expanding to negate slow growth at home, the survey finds. Just over 70 per cent say that growing market share in domestic markets is challenging, with 27 per cent stating it is a major issue currently. The research also reveals that 82 per cent of insurance executives surveyed believe effective capital allocation is the biggest challenge they face when expanding into foreign markets.
David Howie, Senior Vice President and Head of State Street Global Services' insurance business in the UK, said: "Many insurance firms are eyeing global expansion as a response to more muted growth prospects in domestic markets. As insurers ramp up their expansion efforts, they are looking to gain greater coordination and consistency across their multiple local businesses that may typically have been more independent."