Insurance CEOs worried about speed of tech change, claims PwC survey

While insurance continues to be one of the most disrupted sectors in the global economy and insurance chief executive officers (CEOs) are more concerned about the pace of technological change than CEOs in any other industry, according to survey by PwC.

PwC’s 21st Global CEO Survey featured input from 100 insurance CEOs. The findings show insurance CEOs share a generally positive outlook, but actual growth has typically failed to live up to expectations. It did however find that more than 90 percent of insurance CEOs are confident about their own organisation’s revenue prospects over the next three years.

Key findings included the fact that early half (49 percent) of insurance CEOs are planning a new strategic alliance or joint venture to drive profitability and growth over the next 12 months and that half of insurance CEOs believe that global economic growth will improve over the next 12 months, up from only 19 percent in 2017.

According to the survey insurance CEOs three biggest concerns are over-regulation (95 percent), cyber threats (93 percent) and speed of technological change (85 percent). In addition more than 80 percent of insurance CEOs are concerned about shortages of digital skills within the industry and within their workforce, which is the highest percentage of any industry.

More insurance CEOs are concerned about the pace of technological change (85 percent) than leaders in almost any other industry. Technological advances are changing business and operating models, which is challenging to an industry that’s accustomed to slow evolution rather than rapid transformation.

In addition more than 80 percent are concerned about shortages of digital skills within the industry (81 percent) and within their workforce (86 percent). While this is a challenge for all sectors – around three-quarters of participants in the CEO Survey are concerned – insurance CEOs are most concerned. And it isn’t just digital skills that are in demand, but also the creativity and emotional intelligence needed to innovate and reconnect with customers. According to the survey 86 percent of insurance CEOs believe they need to strengthen soft skills in their organisation alongside digital skills.

Commenting on the survey Arthur Wightman, PwC Bermuda leader and insurance leader, said: “Among the many reasons for the high confidence of CEOs in the insurance industry is that the anticipated disruption from incoming competitors, like InsurTech and digital platform players, hasn’t materialised like the industry initially feared. Partnership, not rivalry, with new entrants is the order of the day.

“Substantial opportunities are on the horizon as a new generation of predictive analytics and AI transforms insurers’ ability to detect, anticipate and avert risk.”

Wightman concluded that: “Prospects for the Bermuda market remain good in spite of consolidation. Bermuda has a sustainable future based on the concentration of talent and its ability to find innovative insurance solutions, such as closing the global protection gap.”