Which executives and public figures will grab headlines in 2010? What companies and organizations will be in the news? What tech and business developments will change the competitive environment? Here are 10 trends and topics to watch for major developments in 2010.
1. Vendor Consolidation Gains Momentum
Mergers and acquisitions in the insurance vertical software solutions industry will accelerate, according to a November 2009 Novarica report. The researchers anticipate numerous deals in the $30 million to $75 million range but are reluctant to speculate about the potential of larger-scale deals involving larger vendors that have moved to acquire portfolios of insurance solutions. The report encourages insurers to be aware of the possibility that their solutions vendors could be acquired, based on a vendor's status as one of three types of companies: Rising Star; Good Tech, Small Company; and Stagnant Product Provider. According to the report, "Acquisitions of a Rising Star or a Good Tech, Small Company provider are likely to result in increased investment in the product, while acquisitions of stagnating product providers are likely to result in forced conversions or migrations." As a result, the report advises, "Insurers should protect themselves as much as possible through contractual means, including demanding base code escrow and service-level guarantees that survive change of control." -- Anthony O'Donnell
2. A Bumpy Road to Healthcare Reform
At press time the efforts of the Obama administration to reform the U.S. healthcare -- and health insurance -- system passed a major hurdle when the Senate voted along party lines to bring to the Floor a bill that would overhaul the nation's healthcare system. Still, with continuing disagreement among all the players about what should and shouldn't be included or covered, how much the changes will cost, and who ultimately will foot the bill, it seemed unlikely that President Obama's goal of passing healthcare reform before the end of 2009 would be met. In the meantime, health insurance companies, which can expect continued criticism regardless of what happens on the policy front, are focused on streamlining claims processing, providing customized care-tracking tools and leveraging Web 2.0 capabilities, not only to improve customer and provider experiences, but also to reduce inefficiencies. -- Katherine Burger
3. The Promise of Emerging Markets
While crashing economies have caused many of the world's wealthiest individuals to post huge financial losses, the number of millionaires in China actually is rising. By the end of 2009 the country will be home to 450,000 millionaires with a net worth estimated at about US$1.73 trillion, United Press International reported. Ultrahigh-net-worth individuals in China want the same privileged services as institutional investors and are demanding diverse products -- including insurance, according to Hua Zhang, an analyst in Celent's Asia Research group -- from multiple wealth management companies. Many of China's asset management firms are part of large insurance companies. But Shanghai-based consulting firm Z-Ben suggests that insurers, "the largest and most globally minded investors in China," are now seeking long-term foreign partners to help manage their US$540 billion in assets under management -- an 11 percent rise in assets since 2008. -- Melanie Rodier
4. Insurers Test Mobile Applications
If 2009 taught us anything, it's that people were willing to forget the last bizarre and disturbing decade of Michael Jackson's life. But more important, it also taught us that people enjoy a good mobile app. In April, before the site even reached its first birthday, more than 1 billion applications had been downloaded from Apple's iPhone App Store. That number has since doubled. A very small but growing percentage of those downloads involved apps developed by insurance companies. With carriers such as USAA, Nationwide and AXA Equitable leading the way, the insurance industry is beginning to recognize the importance of not just the mobile channel as a whole, but the mobile application channel specifically. And it's a good thing: The iPhone has shown no signs of losing popularity, while recent offerings based on Google's Android mobile operating system promise to expand the mobile application development universe. As consumers become accustomed to mobile apps in their everyday lives, they'll demand similar functionality from their insurance providers. -- Nathan Conz
5. Can Benmosche Save AIG?
Former MetLife CEO Robert Benmosche emerged from his villa on the Adriatic in 2009 to head AIG after the departure of former Allstate CEO Edward Liddy. Benmosche's forceful style recalls the days of former AIG CEO Hank Greenberg. However, in November Benmosche's threats to quit under what he characterized as the impossible constraints of compensation limits imposed by "pay czar" Kenneth Feinberg raised doubts about the compatibility of that management style with the relationship the company now has with the U.S. government. On the other hand Benmosche's personality and drive could provide the persuasiveness to resolve AIG's lingering legal and financial challenges -- and potentially return the insurer to a competitive state. -- A.O.