Sustaining growth and innovation in the insurance sector– EY
Article Synopsis :
Digital transformation isn’t the only challenge facing global insurers.
In “Sustaining growth and innovation in the insurance sector “, EY and Tapestry Networks share the thoughts of global insurance executives in their own words captured at the Insurance Governance Leadership Network Summit held November last.
Comments are divided into five sections:
1. Global insurance outlook: more challenges ahead for leading insurers
- The insurance industry faces fundamental change on many fronts
- Ongoing challenging conditions have given rise to some common strategic responses
- Many forms of traditional insurance are outmoded
2. New opportunities in asset management governance
- Directors must understand new risks to ensure sound investment strategy
- Returning to fundamentals is essential for good asset management decisions
- Boards can significantly improve their governance of the asset management function
3. Market liquidity: an unintended systemic risk?
4. Leading insurers explore new models for growth and innovation
- Distinct forces are driving both innovation and disruption
- Innovation requires extensive cultural support and new structures
- Digital growth will produce dislocations and new risks for the industry
5. Board-shareholder engagement in an era of increasing activism
- Financial services companies are attracting more attention from activist groups
- Institutional investors are becoming more active
Key challenges in the digital space include:
- Major investments in technology solutions
- Non-traditional competition from Big Data and technology-enabled companies
- Need for more dramatic organizational responses, which comprise of changes in culture and organizational design to drive innovation
- FinTech and InsurTech companies capable of redesigning their processes to adapt are a growing threat to the industry
Other topics addressed include:
- Organizational culture
- Non-traditional (out of industry) partnerships
- Investment funds, VC-partnerships
- Reduction in traditional broker activities
- Cyber risks
- Information asymmetry
- Regulatory constraints
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Digital Insurer's Comments‘I have to say insurance, as a sector, is not attractive. It’s not the sexiest place to be.’ – Participant
‘I detect a certain industry helplessness around innovation. We have been the same for 100 years. What now?’ – Director
Insurance leaders, conference participants, in their own words. Can you relate?
Inertia (and regulation) is a powerful thing and the trillion-dollar global insurance industry isn’t going to change overnight. Carriers, both small and large, with an aggressive, innovative, optimistic mindset, are the sexy place to be.
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