The era of the traditional European multiline insurer is over. These players have become lumbering conglomerates with clients ranging from individuals to large corporations and products from life insurance through property and casualty to asset management.1 This breadth could increasingly be a handicap. Different product market segments enjoy very different prospects for growth and profitability, and the skills and business models needed to succeed will vary from one to another (Exhibit 1).
Indeed, multiline executives are already finding it difficult to obtain superior returns and growth across such a range of businesses. Their immediate challenge will be to find ways of managing this diversity. Many European mulitiline insurers will have to change if they are to develop each business on its own merits. They must abandon their customary undifferentiated management approaches and adopt a multibusiness governance model in which management approaches are tailored to the particular challenges facing the various businesses.
In time, many European multiline insurers, in particular the small and medium-sized players, will also have to take the step of focusing their business portfolio on those businesses where they command or can build sustainable advantages. They must develop superior core skills, primarily in specific product market...