As insurers seek to compete in the challenging global economy, key strategic decisions are critical to striking a balance between growth, profitability, and risk. A combination of slow global economic growth and historically low interest rates in much of the developed world is pressuring insurers on both the top and bottom lines.

Executive Summary

Good governance rarely enhances the creditworthiness of an insurer, but weak governance can have devastating effects, according to S&P's Rodney Clark, who explains key factors in S&P's November 2012 update of its methodology for evaluating the management strategy and corporate governance of insurers.

With low growth rates in the developed world, some companies are looking to the growth markets of Asia and Latin America for business expansion. Others may look to M&A for opportunities, at the same time as competitors are divesting of low return businesses.

With such important decisions looming for many insurance enterprises, corporate governance takes on heightened importance. Standard & Poor’s published its updated methodology for evaluating management and governance for corporate and insurance enterprises in November 2012.

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