Insurance CEOs see technological change, new market entrants and over-regulation as main threats to growth - PwC’s 19th Annual Global CEO Survey

Published at 00:01 AM on 09 February 2016

  • 94% of insurance CEOs are concerned about over-regulation in the sector impacting growth
  • 65% see new market entrants as a threat to growth
  • 84% are confident they will increase revenues in the next 12 months. This rises to 95% when asked about the next three years.
  • 70% plan to implement a cost reduction initiative in the next 12 months

Insurance is one of the top three most disrupted sectors according to PwC’s 19th Annual Global CEO Survey. Only the entertainment and media sector is facing potentially greater disruption, the report says.

Individuals and businesses across the globe are looking to insurance companies to help them manage the increasing risks they face in what is a complex and uncertain business and geopolitical landscape. Insurers are uniquely placed to find an opportunity to provide improved risk analysis, advice and protective coverage in this wider business environment. As such, 64% of insurers are looking to change the way they define and manage risks in response to changing stakeholder expectations.

Stephen O’Hearn, Global insurance leader at PwC, commented:

"Other industries will be looking to insurers to help manage increasingly complex and uncertain business and geopolitical risks. To capitalise on these opportunities, insurers need to embrace new ways of working, novel ways of interacting with customers, and alternatives to traditional products and services."

Technology, the customer, new entrants, data and people

The report shows that insurance CEOs are significantly more concerned about the threat posed by new market entrants than their banking and asset management counterparts.

  • 69% of insurance CEOs are concerned about the speed of technological change in their industry
  • 64% are concerned about the shift in consumer spending and behaviour

Jonathan Howe, UK insurance leader at PwC, commented:

“The customer-led shake-up experienced within the entertainment and media sector gives insurance CEOs a good idea of what lies ahead for them. Insurers are beginning to realise they have nowhere to hide and new market entrants will take margins – the technological revolution is here and insurers need to work with and learn from the innovative start-up companies already operating in this area.

“Customers are demanding a more interactive experience and continue to focus on cost. FinTech companies operating in the insurance space are knocking at the door and are more than happy to set new competitive benchmarks for customer experience.”

  • Technology is the trend that insurance CEOs see as most likely to transform stakeholder expectations in the next 5 years. As a result, more than 70% of insurance CEOs are making significant changes to the way they use technology to assess and meet stakeholder changes.
  • Insurance CEOs cite data and analytics as providing the greatest potential contribution to improving stakeholder engagement
  • 79% see cyber risk as a barrier to growth
  • 70% see limited availability of key skills as a threat to growth

Jonathan Howe, UK insurance leader at PwC, continued:

“In the face of so much change, insurers must ask themselves how they begin to respond and how they change threats into opportunities.  With such rapid technological change, insurers have the choice to determine whether they are part of the disruption or one of the disrupted.

“Insurance companies have a vast amount of customer data at their disposal so it is no surprise that CEOs are switched on to the opportunity available to them if they analyse this data correctly. Do insurers know how much value is hidden away in the data they and their business partners hold and do they know how they can access it?”

“The relationship an insurer has with their customers is currently curtailed by the limited interactions they have. By properly analysing and understanding their data insurers have the opportunity to create an outside-in view and ultimately offer their customers more tailored, valuable and relevant insurance policies. They are also more than aware of the added challenges that regulation and cyber security pose to getting their data policies correct” “At the heart of the challenges faced by insurers is finding the right people with the right skills to implement these changes. Insurers need to continue to bring together employees with diverse skillsets from a range of backgrounds. Only through doing this will they tap in to the talent and imagination needed to succeed.”

Ends.

Notes for editors.

  1. Jonathan Howe is available for interviews. Please contact Ellie Raven on [email protected], +44 (0) 207 804 3663 or +44 (0) 7525 925 830.
  2. This report is a summary of the key findings in the insurance sector, based on a survey of 101 insurance CEOs in 43 countries. From Tuesday 9th February, the full report can be found here: pwc.to/1nqKTPT

 

About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

© 2016 PwC. All rights reserved

Ends.


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About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. © 2016 PwC. All rights reserved

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