We would love to hear from you. Click on the ‘Contact Us’ link to the right and choose your favorite way to reach-out!

wscdsdc

media/speaking contact

Jamie Johnson

business contact

Victoria Peterson

Contact Us

855.ask.wink

Close [x]
pattern

Industry News

Categories

  • Industry Articles (21,155)
  • Industry Conferences (2)
  • Industry Job Openings (35)
  • Moore on the Market (414)
  • Negative Media (144)
  • Positive Media (73)
  • Sheryl's Articles (800)
  • Wink's Articles (353)
  • Wink's Inside Story (274)
  • Wink's Press Releases (123)
  • Blog Archives

  • March 2024
  • February 2024
  • January 2024
  • December 2023
  • November 2023
  • October 2023
  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • August 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • November 2008
  • September 2008
  • May 2008
  • February 2008
  • August 2006
  • Insurer CEOs Confident On Growth Prospects; Lag On Fundamental Strategy Shifts: PwC

    March 14, 2013 by Anand Rao and Eric Trowbridge

    Insurance carrier chief executives are upbeat about their companies’ growth prospects, with nearly 90 percent of those recently surveyed saying they are at least reasonably confident about their revenue growth over the next 12-to-36 months.

    Executive Summary

    Insurance industry executives are confident about revenue growth in 2013, according to a PwC survey, but PwC consultants question whether insurers are moving fast enough to keep pace with fundamental changes in customer demands, technological advances and other transformations impacting the business climate.

     

    The insurance industry CEOs are less optimistic in their expectations for the global economy overall, with just over three-quarters anticipating a stable or improved global economy, PwC’s 16th Annual Global CEO Survey revealed.

    The survey captures the thinking of 1,330 CEOs in various industries in 68 countries, including 92 insurance CEOs in the property/casualty and life/health sectors in 39 countries, who are less worried about their organizations’ growth than peers in other industries. Across all industries, CEOs were less bullish about revenue growth, with just over 80 percent saying they’re at least reasonably confident in an uptick this year.

    Targets For Growth

    In spite of their overall optimism about revenues, familiar problems that tighten the squeeze on margins in developed markets remain for insurance carrier CEOs, including limited product differentiation and a low perception of value among customers. While most insurer CEOs still view their main opportunity for growth as organic growth in existing domestic markets (see related chart, “Carrier CEO Survey: Growth Opportunities”), those growing outside the United States see greater potential in the still largely under-penetrated emerging markets of South America, Asia, Africa and the Middle East.

    Latin America in particular tops the list of the regions CEOs are eyeing for growth, according to survey figures revealing that 88 percent of the industry’s CEOs expect growth in Latin America in the next 12 months. As more and more people there (and in other rapidly developing economies) move into the middle class, they buy cars and homes and invest in retirement products—all of which bodes well for insurers.

    Of course, focusing more on emerging markets is not without its challenges. Notably, the move to new and unfamiliar markets is opening up insurers to risks about which they have virtually no data. In order to not just respond to but proactively manage these risks (and, of course, those in mature markets), insurers will increasingly use “big data” analytics to understand their customers and distributors better, as they go through different life stages,  design products that meet the needs of the customers, and facilitate a seamless interaction with customers across different channels.

    Focus On The Customer

    Compounding these challenges is the fact consumers—regardless of location—have become accustomed to the choice and accessibility of online shopping, as well as the one-click interaction of mobile apps, and increasingly expect this transparency and convenience from insurers. Most CEOs are conscious of these developments and their potential to reshape the key competitive battlegrounds and business opportunities within the industry.

    Building the customer base and improving customer service are the top two priorities for investment. Nearly 60 percent of industry leaders are concerned about shifts in consumer spending and behavior. In response, nearly 90 percent of CEOs say their companies are planning to change their strategies for managing customer growth, loyalty and retention, with nearly 40 percent anticipating major changes to these strategies—and almost nine in ten planning to strengthen their social media engagement.

    57% of insurer CEOs said they were either somewhat or very concerned about the impact of consumer spending and behavior shifts on their growth prospects. Across all industries, the concern level was lower, with less than half expressing similar levels of concern.
    57% of insurer CEOs said they were either somewhat or very concerned about the impact of consumer spending and behavior shifts on their growth prospects. Across all industries, the concern level was lower, with less than half expressing similar levels of concern.
    The Central Role Of Technology

    With analytics playing an increasingly vital role in customer acquisition, customer retention and service, as well as risk and capital management, technology is at the heart of the competitive developments within the insurance sector. Insurers are leading the way in funding, with 86 percent of industry leaders planning to increase investment in technology.

    While 86% of insurance industry CEOs will increase technology investments this year, and 89% are planning changes to increase customers’ loyalty, only 63% plan to increase investments in innovation—and only 15% plan major innovation investments.
    While 86% of insurance industry CEOs will increase technology investments this year, and 89% are planning changes to increase customers’ loyalty, only 63% plan to increase investments in innovation—and only 15% plan major innovation investments.

    However, technological advances aren’t happening in a vacuum, and could allow a major online, mobile, social network, or other new entrant to move into the market. Most established players face the impediment of expensive and unwieldy legacy systems, but new entrants could develop automated underwriting and customer relationship management capabilities from scratch at substantially lower cost structures than incumbents. This would allow them to undercut established players, while offering the fast and responsive coverage people want. In turn, cloud computing would allow them to develop a service model built around cheap and flexible just-in-time virtual outsourcing.

    Technological advances aren’t happening in a vacuum, and could allow a major online, mobile, social network, or other new entrant to move into the insurance market.
    The Need To Innovate

    Surprisingly, however, most insurance CEOs (55 percent) say they aren’t concerned about the speed of technological change or the threat from new entrants (58 percent), and few insurers are comfortable with using new data sources and analytical techniques to shape how they make decisions. In addition, survey findings raise questions about whether or not insurers are moving quickly enough to keep pace, with only 16 percentanticipating the fundamental strategic shifts that they may need to make. Underlying all of this is an apparent preference for incremental change over radical innovation. In fact, only 15 percent of survey respondents are planning a major increase in their investments in innovation.

    PwC experts say survey findings raise questions about whether or not insurers are moving quickly enough to keep pace with external changes, with only 16 percent anticipating the fundamental strategic shifts that they may need to make.
    PwC experts say survey findings raise questions about whether or not insurers are moving quickly enough to keep pace with external changes, with only 16 percent anticipating the fundamental strategic shifts that they may need to make.

    Ongoing success is likely to require a cultural shift as insurers seek to better manage risk, meet more exacting customer expectations, and remain competitive. At the heart of this shift is an environment that encourages people to embrace innovation, engage more closely with customers, and provide them with more effective risk solutions.Several insurers are already taking steps to change institutional culture, notably by seeking to engage more closely with customers. However, many of them are finding it difficult to translate these objectives into discernible changes in how people think and behave in their everyday activities. Culture will only deliver the organization’s key strategic goals (for innovation and sharp customer focus, for example) if it is second nature and firmly part of the habits and routines of staff at all levels.

    Existing Business Models Are At Risk                                                                                                    

    In conclusion, while many insurance CEOs have fixed their sights on the immediate challenges of low interest rates, slowing demand in mature markets and the resulting pressure on share values, they cannot afford to ignore the following transformational changes on the horizon:

    • Diverging trajectories of growth in different parts of the world.

    • Customer demand for more transparent and accessible products.

    • A technological revolution in the form of social, mobile, analytics, and cloud computing that will transform all aspects of insurance.

    • A heightened threat of new entrants picking off profitable business.

    • Rapid change that is putting existing business models at risk.

    The insurers that adapt effectively will focus keenly on the customer and have a superior capacity for innovation and reinvention. They’ll also be able to anticipate— not just react to—change, and be nimble enough to quickly capitalize on emerging opportunities. Businesses that fail to respond could find themselves priced out of the market, falling short of customer expectations, and under threat from aggressive new entrants.

    Fast Fact: 87% of insurance carrier CEOs said they are will strengthen their engagement with social media users in the next 12 months, with 24% anticipating major change; across all industries, the percentages were 78% and 23%.

    Originally Posted at Carrier Management on March 11, 2013 by Anand Rao and Eric Trowbridge.

    Categories: Industry Articles
    currency