At first sight, it might seem a relatively straightforward task to define the size and scope of the European insurance market. Statistics show that the property and casualty (P&C) market in Germany is worth DM100 billion, for example, and that Switzerland has Europe’s highest life premiums per capita.

But statistics mask industry trends that pose significant strategic questions for every chief executive officer of an insurance company. The traditional delineation between life and non-life insurance products is beginning to fade, as is the distinction between the insurance and reinsurance businesses. At the same time, the very boundaries of the insurance industry are blurring. Life investment companies, reinsurers, asset managers, investment bankers, and private bankers all find themselves competing in the same arena for business not always traditionally regarded as insurance.

To define insurance in terms of the types of cover available, such as motor, death, invalidity, and fire, therefore no longer suffices. A different gauge, capable of reflecting the industry’s growing complexity, is required if CEOs are to understand the trends in their industry and plan accordingly. It is therefore useful to examine the four value propositions around which today’s European insurance industry appears to be grouping.

Insurance as...