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The Actuary The magazine of the Institute & Faculty of Actuaries
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Insurance industry most threatened by disruptive change

CEOs in the insurance industry are more concerned about the combined threats to their companies’ growth prospects than leaders in any other sector, according to findings from PricewaterhouseCoopers’ (PwC) CEO Survey.

14 FEB 2017 | CHRIS SEEKINGS
Concerns about disruptive change have continued to rise ©Shutterstock
Concerns about disruptive change have continued to rise ©Shutterstock

They expect to be hugely impacted by disruptive technological, economic, social, and political changes in the coming years, with business chiefs in entertainment, banking and healthcare less concerned.

Over-regulation was found to be the number one worry for 95% of insurance bosses worldwide, with more than half believing it is becoming harder to compete in an open global marketplace as countries adopt more protectionist policies. 

PwC global insurance leader, Stephen O’Hearn, said: “Insurance CEOs are acutely aware of the disruption and change facing their industry, the transformational impact of which is now evident.

“Concerns over regulation, the pace of technological change, shifting customer behaviour, and competition from new market entrants have continued to rise from their already high levels.

“When the impact is put together, no other sector is facing as much disruption in these four areas.”

The top five disrupted sectors, and the percentage of CEO’s “extremely concerned” about the relevant threats are shown below:

The top five disrupted sectors

Other threats identified in the survey include economic growth (84% of CEOs), social instability (75%), geopolitical uncertainty (74%), and the future of the Eurozone (72%).

However, despite soft premium rates, low interest rates, and subdued economic growth contributing to ongoing cost pressures, 81% of CEOs are confident that their companies can achieve revenue growth this year.

“The optimism shown by insurance CEOs for continued growth shows how the speed of technological change can be turned into a great opportunity,” PwC UK insurance leader, Jim Bichard, said.

“As customers demand more interactive and transparent interactions with their insurers, partnering with start-ups to learn new ways of working enables the sector to tap into a wealth of different experiences.

“Insurers can reap the benefits of being proactive in disrupting themselves as a way of combating perceived external threats to growth such as regulation.”