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PricewaterhouseCoopers Finds FSIs Focusing on Growth

Organic growth is taking the place of conserving and building resources as a priority for financial services organizations.

Organic growth is now a top priority for financial services companies that have spent recent years focusing on conserving and building resources while creating value for shareholders, according to results from a survey conducted during February and March 2005 by PricewaterhouseCoopers (PwC, New York) and the Economist Intelligence Unit (London). The survey found that 65 percent of the financial services senior executives surveyed agree that growth is higher on the agenda than it was last year, while 95 percent of executives in the Americas and Europe look to organic growth -- as opposed to mergers and acquisitions, partnership arrangements, etc. -- as the number-one strategy to achieve growth targets this year. Eighty-two percent of companies in the Asia-Pacific region also cite organic growth as the top strategy.

"Technology is a big enabler for growth, especially in the CRM (customer relationship management) and front-office space, to create new markets," said Nigel Vooght, partner, PricewaterhouseCoopers. Twenty-three percent of the respondents cited IT/technology as a critical enabler of growth over the next twelve months. IT/technology ranked fourth, following sales, marketing and customer services capabilities (42 percent); human resources (36 percent); and brand, reputation and customer satisfaction (35 percent).

Advancements in technology also will play a big role in the insurance sector as a provider of more sophisticated approaches to regulation and reporting as well as more systematic approaches to risk and capital allocation and ERM (employee relationship management). These areas will support growth in health insurance as cost of care increases and aging population swells, and the demand for non-life insurance grows with developing economies such as China's. The non-life market in China grew at an average rate of 16 percent over the past five years, according to the survey, which included over 15 one-on-one interviews with executives as well as an online survey of Executives from 201 institutions in Asia, Europe and North America.

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