THE U. S. INSURANCE INDUSTRY: Structure, Performance, and Prospects

U. S. insurers have achieved their strong position in the world insurance industry primarily through servicing demand in the large domestic markets. Future growth will require U.S. insurers to cultivate a more international focus. The next decade is likely to bring significant changes in the structure and operation of both life and property-casualty insurers. Increased competition from banks, mutual funds and securities firms on the life insurance side of the industry, and from self-insurance and customer- generated insurance mechanisms on the property side, will heighten competitive pressures. Domestic market growth, particularly for the life business, is slowing. However, world markets are becoming more open and enticing for U. S. insurers. The recent international trade liberalization agreements championed by the United States and other market-liberalizing actions have increased market opportunities for U. S. companies. Technology gains in telecommunications, computer information and data processing have contributed to increased efficiencies and productivity. These developments, together with slow growth in the domestic market, will lead to new products, reduced costs and a more streamlined and competitive industry--an ultimate boon to both insurers and their customers.