When insurance firms launched social media initiatives, the results were rewarding.
Los Angeles, CA (PRWEB) June 25, 2012
IBISWorld estimates that revenue for the Actuarial Consulting Services industry will increase 2.4% annually to $1.2 billion in the five years to 2012. While the industry has experienced growth, revenue declined 4.1% in 2009 as corporate profit fell and businesses were forced to cut back on outsourced and professional services. According to IBISWorld industry analyst Kevin Culbert, revenue has since improved, though, as insurance companies have put an emphasis on mitigating risks and financial service firms have faced increasing regulation.
During the recession, many insurers lost money on subprime mortgage holdings and other risky investments. These losses have sparked more interest in actuaries, which are used to assess the risk of specific events occurring, including employee disability, death, loss of company property or natural disasters. By analyzing the probability and likely cost of such events, actuaries can help create policies that help minimize the associated costs of risk. Over the past five years, catastrophe uncertainty has also increased, which has boosted demand for actuarial consulting services. Credit-rating agencies estimate that yearly losses from catastrophic events – such as hurricanes and fires – are increasing. Consequently, insurance companies have turned to actuaries to help minimize risk, says Culbert, “which has caused revenue growth for actuarial consultants by increasing the amount of work that is outsourced to them and the amount of auditing that is required of in-house actuarial teams in downstream industries.”
The Actuarial Consulting Services industry is largely comprised of medium, small and nonemployer firms that offer specialized services or operate on a regional or local basis. Over the five years to 2012, the industry has faced increasing competition from general management consulting firms, many of which have acquired or launched their own actuarial services, which has increased industry concentration. For example, Aon Corporation merged its consulting division (Aon Consulting Worldwide) with Hewitt Associates to form Aon Hewitt in October 2010. During the same year, Towers Perrin and Watson Wyatt merged to form industry leader Towers Watson. As a result of such acquisitions, the number of industry firms has declined annually on average over the past five years to about 3,380 in 2012.
In the five years to 2017, industry demand is expected to rise as a result of increasing corporate profit and growing regulation in financial services industries. Furthermore, a decline in the unemployment rate will boost demand for insurance and retirement-related actuarial services. As corporate profit rises, downstream markets will have more cash to spend on outsourced services. Increased regulation of financial services will call for reduced risk to prevent another meltdown of the US economy, which will boost demand for the Actuarial Consulting Services industry. For more information, visit IBISWorld’s Actuarial Consulting Services in the US industry report page.
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IBISWorld industry Report Key Topics
This industry assesses the risk of events that occur by using statistical analysis and helping create policies for businesses and clients that minimize the cost of that risk. This industry does not include actuaries that are employed in-house by non-consulting firms, such as financial service providers and insurance companies.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
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