Insurance

70%

of insurance CEOs are planning changes in strategy over the next 12 months

15th Annual Global CEO Survey

Insurance industry insights

David Law
Global Insurance leader

Regulation and economic uncertainty are dominating the boardroom agenda. But success also depends on being able to respond to the longer term developments and opportunities that are transforming their sector.

Tough environment shapes strategy. Seven out of 10 insurance CEOs are planning changes in strategy over the next 12 months as they try to contend with the difficult economic and regulatory backdrop. Longer term challenges such as shifts in government policy and shareholder expectations are having less influence on strategy.

CEOs are planning changes in strategy over the next 12 months

Uncertainty holding back growth. Nearly half of insurance CEOs believe that the economy will continue to get worse over the next 12 months. Sustaining growth is difficult in this environment – only 15% of sector CEOs are planning to carry out a cross-border acquisition in the coming year.

Threats to growth

Missing an opportunity. Developing the innovative solutions needed to help people manage an increasingly complex and uncertain environment is one of the key opportunities for insurers. But less than 10% of insurance CEOs are planning to significantly step up investment in addressing the risks of climate change.

Concerns over talent shortages. Nearly 60% of insurance CEOs believe skills shortages are a threat to growth and nearly 50% that it’s getting harder to recruit and retain good people in their industry. More than 30% have been unable to pursue a market opportunity because of talent constraints.

CEOs are concerned about shortages of skilled talent

Quotes

Daniel S. Glaser

Group President and COO, Marsh & McLennan Companies Inc. View profile

You need an environment that’s open and transparent, where it’s safe to speak up and give your views, because there will be no innovation without some element of dissent. Innovation really starts with, “Why do we do it that way?”

Brian Duperreault

President and CEO, Marsh & McLennan Companies Inc. View profile

Recognising that the world is somewhat split down the middle between slow growth and rapid growth, you’d better be able to operate in both at the same time... You have to find ways of moving your resources – and for us it’s talent – from where it’s not being utilised to where it can be utilised.

Tidjane Thiam

Group Chief Executive, Prudential Plc View profile

If you have the right culture, you can run a well-managed business with limited risk, at a reasonable cost. If you have the wrong culture, then the cost of compliance is infinite. So the most effective tool to run a well-controlled business is culture, and that’s about people.

Tidjane Thiam

Group Chief Executive, Prudential Plc View profile

We are an industry based on trust and we couldn’t operate without regulation that the customer can believe in but, that said, we could reach a point where regulation becomes excessive and counterproductive.

Martin Senn

CEO, Zurich Financial Services Group View profile

Low interest rates are a challenge for the industry. It means that the largest sources of income for the industry are under pressure. And the effects will most likely accelerate over time because insurers tend to invest for the long run.

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