In the last issue of Intelligent Insurer, we examined the longevity of some of Europe’s oldest reinsurers—some thriving in stark contrast with wider trends in the corporate world. Here, we examine the same dynamic from a US perspective.
The October issue of Intelligent Insurer examined the dynamic of corporate longevity in the reinsurance industry. This is particularly relevant in relation to the European market, home to several of the industry’s biggest reinsurers—and also the oldest, with the likes of Swiss Re and Munich Re clocking up more than 100 years of corporate history.
It is also very relevant in relation to the rapid change taking place in the industry. As Richard Foster, executive in residence at Yale Entrepreneurial Institute and a specialist in the subject of corporate longevity, pointed out in that issue, corporate longevity has as much to do with luck as it does with judgement. Operating in a sector that changes little and benefits from economies of scale—both factors true of reinsurance—is one of the greatest indicators of a company’s ability to survive for a long time.
Until things start to change, that is. Under these circumstances, even big companies committed to change and innovation often struggle to adapt quickly enough, compared with more nimble, newer, competitors. This thesis should act as a word of warning to many incumbent players in the industry.
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Richard Foster, Yale Entrepreneurial Institute, Standard & Poor's, North America