Budget issues may cripple U.S. economy, insurance execs say

Posted on: Tuesday, February 12, 2013

While the financial issues facing the United States may not have a significant impact on insurance leads given the implementation of the Patient Protection and Affordable Care Act, it may have a significant effect on the country's economy, insurance industry executives recently opined.

At the 17th annual Property/Casualty Insurance Joint Industry Forum sponsored by the Insurance Information Institute and held in mid-January, approximately 95 percent of executives in attendance believed this to be the case.

Steven Weisbart, senior vice president and chief economist for the III, said that this may result in more insurance business.

"As the economy continues its recovery, exposures will continue to grow, implying further increases in insurance premium volume," said Weisbart.

However, when property and casualty insurance executives were asked whether this would ultimately have a net positive effect on the economy only 23 percent of respondents said it would.

With President Barack Obama's annual State of the Union address scheduled for February 12, many of the country's budgetary issues will likely be discussed, including the $16 trillion debt, attempts at balancing the budget and the potential for sequestration and how this will may affect the economy.

Otherwise, insurance industry execs are bullish about how lead generation will pan out in 2013. For example, nearly 60 percent of participants in the poll said they expect auto and homeowners insurance lines to improve in 2013. Only 5 percent said they expect conditions will weaken, while 21 percent said they will likely remain where they are.

Weisbart cautioned, though, that low interest rates may force insurers to "price risks in closer relation to their claims potential."

Posted In: Insurance News, Property & Casualty Insurance

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