Leading from the front – Key Findings from PWC CEO Survey
Article Synopsis :
Spotting attractive growth opportunities is a common challenge for insurance CEOs, especially in today’s fast moving digital marketplace.
Growth is the focus of PwC’s report “Leading from the front – Insurance industry summary”. Based on interviews with 74 insurance CEOs in 39 countries and in-depth interviews with Aviva Group CEO Mark Wilson and Arch Capital Group Limited Chairman, President and CEO Dinos Iordanou, key points include:
- More than 90% of insurance CEOs are focused on increasing revenues over the next three years
- More than 70% of insurance CEOs are concerned about slow or negative growth in developed markets and the adverse impact of governmental responses to fiscal deficits and debt burdens
- Insurance penetration is less than 3% of GDP in emerging markets, compared to more than 8% in developed markets. This 5% ‘gap’ offers enormous potential
- Less than 40% of polled insurers have actually taken concrete steps to build out talent, technology, distribution, data analytics and innovation capacity to fuel growth. Most are still in the planning stage
The top three forces CEOs think will transform their business over the next five years are:
- Technological advances – Technology is shaping customer expectations and creating revolutionary new capabilities to meet them
- Demographic changes – A longer living population presents clear opportunities. The challenge is how to encourage younger people to take out life and pension plans
- Global economic shifts – How will insurers realize the enormous untapped potential of emerging markets?
The report articulates six steps to help capitalise on trends and lead in the increasingly dynamic insurance marketplace:
- Connect with the customer – Connect with customers in an intuitive, proactive and trusted way.
- Insight to foresight – Telematics, big data, and other new analytical techniques enable insurers to provide more responsive products at more competitive rates.
- Speed to market – ‘Greenfield’ operations could be up and running quickly and then tested, adapted and expanded to meet rapidly evolving demands.
- The right people – People skilled in the right digital skills will take insurers a long way.
- Adapt to new regulation – One of the most important competitive differentiators is going to be how effectively insurers anticipate and adapt to regulatory changes.
- Targeted acquisitions – Acquisitions may be the best way to acquire new skills and catalyse change
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Digital Insurer's CommentsBeing digital is more an approach, a state of mind, than the deployment of new technologies. Being digital means seeing old markets through new eyes, investing in business cases more speculative than times past, with a willingness to fail, as long as the failure comes fast and brings fresh knowledge in vital new areas.
Is insurance a growth industry? It depends. Digitally-minded insurers will likely grow, often at the expense of analog-minded counterparts.
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