Key messages
- Escalating frequency and severity of global risks—from climate change to cybercrime—is intensifying focus on the insurance industry’s capacity and readiness to react as society’s “financial safety nets.”
- Most insurers are realizing that reacting to risks may not be good enough and are undertaking transformation efforts aimed at preventing losses from happening in the first place.
- This shift to a more customer-centric business model will likely require advanced technology adoption and modification of company culture to help minimize siloed interactions, enhance collaboration among employees, and increase accessibility of customer data—but skill sets may need to be augmented.
- Merger and acquisition (M&A) activity has been on a decline since Q2 2022 due mainly to macroeconomic factors. However, as increases in interest rates and inflation ease, pent-up activity may drive an upsurge in deals later in 2023 into 2024. Insurance technology companies (InsurTechs) remain front and center of acquisition activity as carriers increasingly look to these capabilities for point solutions across the value chain to power transformation efforts.
- A fundamental mission underlying much of this change is that the industry’s role is pivoting to that of a sustainability ambassador, influencing and propelling purpose-driven decisions and strategies of clients across industries to create a better workplace, marketplace, and society.
Insurers are transforming to achieve customer-centricity and elevate purpose
Change is accelerating all around us, possibly at a faster pace than in any period in history. Shifts in climate, technology, workforce, and customer/societal expectations combined with macroeconomic and geopolitical volatility are compelling enterprises across the globe to transform their tech infrastructure, products and services, business models, and organizational culture to adapt not just to fuel profitability but to remain relevant and survive. The insurance industry is no exception. In fact, these colliding forces could potentially be the catalyst that sparks reinvention both in how the industry conducts its business and in its overall purpose and role in society.
Insurers have the potential to achieve even greater social good largely because they already act as society’s “financial safety net,” providing a backstop against financial loss for innumerable risks worldwide. However, more insurers are realizing they have a bigger role to play in helping prevent risk, mitigating loss severity, and closing life and non-life protection gaps in global markets, especially in the face of the growing number of what appear to be financially unsupportable risks.
Existential threats, such as catastrophic climate change, the explosion in cybercrime, and concern over vast uninsured and underinsured populations, are driving many insurers to reimagine how to confront disruptions caused by the changing environment and help consumers across all segments prevent or mitigate risks before they occur, rather than merely paying to rebuild and recover after the fact. Even while the most extreme events may appear unavoidable, insurance combined with proactive risk management can still help minimize the degree of their impact on affected individuals and communities
For full report please visit the authors website
Courtesy : https://www2.deloitte.com/
Disclaimer : This report has been published for information purpose. All the copyrights of the publication remain with the original publishers of the report.
