A survey by PwC has revealed that re/insurance industry CEOs are more concerned about threats to industry growth than leaders in any other industry.
Results from PwC’s 20th annual Global Survey of re/insurance CEOs that polled opinions of 95 re/insurance CEOs from 39 countries, showed industry leaders feel more threatened than leaders of sectors like entertainment, media, banking, and healthcare.
But despite the massive anticipated disruption, 80 percent of re/insurance leaders believe they can grow revenues through embracing new technologies, adapting their workforce and pursuing M&A activity.
Main fears the CEOs highlighted were around the speed of technological change, over-regulation to the market, and threats from new entrants to the market.
Other reported areas of concern surrounded changes to global economic, social, political, and environmental platforms.
“Over-regulation continues to be the number one concern for 95% of insurance leaders across the globe. Other threats identified are uncertain economic growth (84%), social instability (75%), geopolitical uncertainty (74%) and the future of the Eurozone (72%),” PwC said.
83 % of re/insurance CEOs cited technology as a threat to growth with “over a quarter (28%) saying technology will completely reshape competition in the industry over the next five years.
“New entrants to the market continue to be perceived as a threat, with 65 % of insurance leaders highlighting concerns about the competition they face.”
Globally, 60% of those surveyed said they believe protectionist national policies are making it harder to compete in an open international marketplace.
78% of industry leaders cited concerns over shifting customer behaviour, and said they believe a key adaptation strategy is to seek a diverse workforce that properly represents their customers, although they have struggled with finding and retaining talent with key skills.
Despite the possibility of being seriously impacted by a myriad of social and technological disruptors, over 8o% of CEOs remained optimistic that continued growth was possible.
Commenting, 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.”
Re/insurance CEOs believe strengthening their digital and technological capabilities is the most important area to capitalise on new growth opportunities and 61% say they are exploring the benefits of humans and machines working together in order to ensure their workforce is fit for the future.
Following a wave of industry mega-deals in late 2015/ early 2016, over a third (35%) of insurance and reinsurance CEOs say they are planning new M&A activity in the next 12 months to drive growth and profitability.
