19th Annual Global CEO Survey – Seizing the Future – PwC
Article Synopsis :
How to lead in complex times?
To help find answers, PwC surveyed 101 insurance CEOs in 43 countries and conducted an in-depth interview with CEOs of AIG (US) and Legal & General for its “19th Annual Global CEO Survey”.
According to the survey report, insurance industry CEOs see themselves under threat from technology, regulation, and changing consumer behaviour and spending. The results indicate that 69% of CEOs feel threatened by the speed of technological change and 64% are worried about changing consumer spending and behaviour. Some of the other key concerns and findings are:
- Growth – 74% of CEOs are concerned about geopolitical uncertainty
- Greater Expectations – 52% of CEOs say creating value for a wider array of stakeholders helps profitability
- Transformation – 90% of CEOs are changing how they use technology to deliver on wider stakeholder expectations
- Measuring Success – 76% of CEOs agree that business success will be redefined by more than just financial profit
Though adapting to the new dynamics concerns some insurers, there are many who see only opportunities amid all the chaos. For example, established insurers have started embracing digital technology and are harnessing it to transform their value chain for agility and reduced costs. They are also searching for new data points to enhance the customer experience and outcomes.
Other key findings from the survey are:
- 70% are planning to implement cost-reduction initiatives that would increase efficiency and productivity.
- 72% feel the need to change the way technology is being used for improving management of stakeholder expectations.
- 79% voted “Data & Analytics” as the top technology, which will have the greatest return in terms of stakeholder engagement.
- The barriers to meeting stakeholder expectations include – additional cost (48%), regulation (46%) and customer reluctance to pay (31%).
- 71% of CEOs feel that the talent gap is a threat to the growth.
Though the industry understands the need to embrace technology there are certain dynamics which must be considered:
- Maximising the societal value of R&D and innovation
- Costs investors and stakeholders are willing to pay
- Use of data & analytics to maximize returns, but only if the right kind of information is available in real-time and the customers are willing to share
- Though the talent gap is a concern, less than a quarter of CEOs are changing the way they manage talent to attract and retain needed skillsets
Based on survey results, PwC issues seven recommendations for surviving escalating disruption in the industry:
- New Customer-Centricity benchmarks with the use of Internet of Things (e.g. sensors) to understand customer points of view.
- Embrace disruption with collaboration with FinTechs.
- Expand sources of information to understand emerging risks and their implications, changing stakeholder expectations and engagement. This can include partnerships with banks, retailers or affinity groups to gain customer information.
- Be regulator and customer-centric.
- Tackle cyber risk with an updated threat assessment and monitoring.
- Fill the talent gap.
- Integrate tax with strategic management to be cost-efficient and compliant.
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Digital Insurer's CommentsInsurers must embrace new ways of working, novel ways of interacting with customers, and alternatives to traditional products and services. Digital technologies enable all of these and executives, it seems, are slowly coming ‘round.
The digitization of customers combined with the digitization of risk itself, with the proliferation of telematics and sensor networks, means in ten years’ time every successful insurance company will be a technology company at its core. Executives leading the change, hard as it is, will not only find themselves at the head of their respective companies but the forefront of the industry.