PwC has reported that 85% of Chief Executive Officers (CEO) in the re/insurance industry have expressed concern over the pace of technological change, a higher proportion than leaders in almost any other industry.
100 re/insurance CEOs participated in PwC’s 21st Global CEO Survey, which revealed a generally positive outlook among industry heads, but also found widespread anxiety and apprehension regarding the impact of new technologies.
Re/insurance continues to be one of the most disrupted sectors in the global economy, and this was reflected in PwC’s survey, alongside other high-priority concerns like the speed of technological change, over-regulation, and cyber-threats.
Over 80% of respondents were concerned about a lack of digital skills in their own workforce and in the industry more generally, although there was also a similar demand for more ‘soft skills’, like creativity and emotional intelligence.
PwC suggested that the industry will have to significantly adapt its business and operating models to accommodate the pace of technological change, as it is currently more suited to slow evolution than rapid transformation.
It added that keeping up with technological demands will likely require a clear strategy for decommissioning legacy systems, accelerating automation, and laying platforms for further transitional shifts.
However, PwC also found that over 90% of re/insurance CEOs are confident about the revenue prospects of their own organisation in the next three years, and that nearly half are optimistic about global economic growth over the next 12 months, compared to 19% in the previous survey.
This indicates that CEOs consider technology to represent significant opportunities for growth, as well as operational challenges, and even implies that past technological apprehension may have been unfounded.
Arthur Wightman, PwC Bermuda and Insurance Leader, said: “Among the many reasons for the high confidence of CEOs in the insurance industry is that the anticipated disruption from incoming competitors, like InsurTech and digital platform players, hasn’t materialised like the industry initially feared. Partnership, not rivalry, with new entrants is the order of the day.
“Substantial opportunities are on the horizon as a new generation of predictive analytics and AI transforms insurers’ ability to detect, anticipate and avert risk.”
Additionally, PwC Bermuda Insurance partner Matthew Britten commented: “The grounds for optimism among insurers include the increasing digitisation of the global economy and resulting shift in customer preferences.
“This opens up a range of new opportunities to both dramatically modernize processes to enhance customer interactions while reducing costs, and to meet the accelerating need to provide innovative insurance coverage against the nature of the intangible risks that are emerging as a result, such as we have already been seeing with cyber insurance.”
He continued: “The successful re/insurers are going to be those that are prepared to capitalize on these new opportunities, while those weighed down by legacy and other long-term issues are going to be challenged.”
You can read more on PwC’s survey of CEO’s here.
