Insurance CEOs are more concerned than leaders in any other industry about threats to their growth prospects, according to PwC’s annual global CEO Survey.
PwC polled 95 insurance CEOs from 39 countries, who anticipate being hugely impacted by disruptive change and feel more threatened than leaders of sectors including entertainment and media, banking and healthcare.
Threats highlighted as major concerns include fast-paced technological changes, competition from new ventures, over-regulation and shifting customer behaviour.
According to the survey, over a quarter of insurance leaders said that technology will completely reshape competition in the industry over the next five years and 83 percent cited it as a threat to growth.
Competition from new entrants to the market has been highlighted as another major concern by over 65 percent leaders. Over half of respondents (60 percent) believe it is becoming more difficult to compete in an open global marketplace amid moves toward more protectionist national policies.
Over-regulation continues to be the top concern (95 percent) for insurance leaders across the globe. Other threats include uncertain economic growth (84 percent), social instability (75 percent), geopolitical uncertainty (74 percent) and the future of the eurozone (72 percent).
Industry leaders are also concerned about shifting customer behaviour, as 78 percent of CEOs say this threatens growth (up from 64 percent last year). In order to adapt, insurers need to ensure they have a diverse workforce representing their customer base but 83 percent of insurance CEOs see a lack of availability of key skills as a threat to business growth.
Nevertheless, a majority of insurance leaders are confident they can grow revenues through embracing new technologies, adapting their workforce and pursuing M&A activity.
Despite soft premium rates, low interest rates and subdued economic growth contributing to ongoing cost pressures, insurance CEOs are generally optimistic about their companies’ growth prospects with 81 percent of those surveyed confident they can achieve revenue growth over the coming year.
They also believe that strengthening their digital and technological capabilities is the most important area to capitalise on new growth opportunities and 61 percent say they are exploring the benefits of humans and machines working together in order to ensure their workforce is fit for the future.
Jim Bichard, UK insurance leader at PwC, said: “The optimism shown by insurance CEOs for continued growth shows how the speed of technological change can be turned into a great opportunity. As customers demand more interactive and transparent interactions with their insurers, partnering with startups to learn new ways of working enables the sector to tap into a wealth of different experiences.
“By engaging with these new entrants to the market and simultaneously rethinking their in-house talent strategies, companies are waking up to the fact that a smart, diverse workforce will be their secret weapon. Insurers can reap the benefits of being proactive in disrupting themselves as a way of combating perceived external threats to growth such as regulation.”
Source: Intelligent Insurer