Insurance at a crossroads
The insurance marketplace is in transformation, creating openings for some and challenges for others. Fifty nine per cent of insurance CEOs believe there are more opportunities than there were three years ago, but 61% see more threats.
Disruption on multiple fronts
Insurance CEOs are most likely to see regulation as a source of disruption, creating upheaval and more costs on the one side and diverting attention from other strategic challenges on the other. The other major disruptors cited by industry leaders include changes in distribution channels, shifts in customer behaviour and increasing competition, especially from technology companies.
Realising the digital potential
Insurance CEOs recognise how digital technology can help them sharpen data analytics (90%), strengthen operational efficiency (88%) and enhance customer experience (81%). Yet, are they making the most of digital’s potential? Most insurers are still primarily focused on e-commerce – doing what they already do just via a different channel. Leaders are using digital to engage more closely with customers, fine-tune underwriting and develop customised risk and financial solutions. They’re also pushing back commercial frontiers in areas such as real-time risk monitoring, more proactive risk prevention and lowering the cost of life and pensions options for younger and less wealthy consumers.
Seeking out complementary capabilities
Nearly half of insurance CEOs plan to enter into a new joint venture or strategic alliance over the next 12 months. Two-thirds see these tie-ups as an opportunity to gain access to new customers (much more than in other FS sectors). More than 30% see alliances as an opportunity to strengthen innovation and gain access to new and emerging technologies. Yet, two-thirds do not currently have plans to partner with start-ups, even though such alliances could provide valuable access to the new ideas and technologies they need.
Attracting fresh ideas and skills A rapidly changing market requires a more diverse workforce with new talents. Eighty per cent of insurance CEOs now look for a much broader range of skills. At the same time they recognise the challenges, with 71% – even more than last year – seeing the limited availability of key skills as a threat to growth.
Digital advances, customer insights, regulation and changes in the product offering are the key disrupters in the Asia Pacific region.
Our PwC insurance leaders for Hong Kong, China, Australia, Vietnam, Japan, Singapore, Thailand, India, Taiwan and Malaysia explore this further.