Insurance Industry

One the most rewarding work experiences I’ve had in my career has been working for a diversified global insurer and one of the largest property and casualty insurers in the U.S. During the early 1990’s the international division of this U.S. based insurance company only held about $190 million in foreign premiums. At the same time during the 1990’s changes in the U.S. insurance industry forced all insurance firms to seek profits in new ventures. The forces that originated in the home country of this insurer quickly influenced the firms life and future development. As the firm had to quickly reexamine their business models and potential areas of growth they decided to heavily expand their international operations and foreign direct investments. Insurer

This insurer focused on purchasing established companies in foreign markets and targeting overlooked markets in Europe, Asia and South America. Focusing on acquisitions in locations like Spain, Portugal, and establishing offices in unexpected places like Vietnam and Chongqing, China (influenced by forces beyond the home nation as the Chinese government was pushing for foreign investment to develop this western area of China). By 2004 this insurers international division holdings of foreign premiums had grown to about $4 billion and accounted for one-fourth of the company’s revenue. Part of this success was because the insurer possessed the 3 advantages outlined in the OLI Model, ownership specific, location specific, and internalization specific advantages.

Recent regulatory changes in Ecuador allowed them acquisition of two established insurers that merged into the 5th largest insurer in the Ecuadorian market. From an IT Risk perspective I was involved in the painful challenging joys of helping integrate and standardize IT controls and compliance for this merger. As of today international holding premiums total about $10 billion, a drastic increase from the $190 million in the 1990’s.