As change accelerates, insurers need profound transformation and the right talent, reveals EY Insurance Outlook 2020
Insurers agree that talent is the "secret sauce" to maximize returns on investments in technology, digital transformation and new business models. But with the industry struggling to attract the right talent, the report finds that insurers need to either reposition themselves as technology firms or proactively communicate on why the industry matters, what value it brings to society and the overall appeal of an insurance career.
Isabelle Santenac, EY Global Insurance Leader, says:
"In an industry that impacts our lives every day – from natural catastrophes to cyber-risks to better health outcomes – and in an increasing digital world, being more customer-centric and improving the customer experience is an imperative. Considering the emergence of new risks, insurers should focus on risk prevention in addition to risk management. Attracting and retaining the right talent as well as reskilling the existing workforce will be essential in this transformational journey."
Additional priorities for global life and non-life insurers according to the report include:
- Achieving operational excellence and cost efficiency
- Managing regulatory pressures
- Digitizing distribution
- Mastering emerging and disruptive technology
- Navigating the risks and opportunities of climate change
The top 2020 trends for
"The current environment for
While the industry fundamentals appear sound, regulatory and economic uncertainties, and country-specific issues are clouding the
"The
Battling regulatory pressures such as IFRS 17 while reskilling talent and enabling digital transformation is proving to be a tricky balancing act for European insurers that are struggling for growth. Non-life insurers must strike the right balance between human and digital distribution, navigating regulation and exploring the opportunity and threat of sustainability and climate change. At the same time, life insurers will look to become more cost efficient by exploring new propositions through connected devices and financial wellness offerings to tackle the challenge of extremely low interest rates.
The report finds that key actions for European insurers (both non-life and life) in 2020 include: managing persistent regulatory pressures, digitizing sales and distribution and achieving cost efficiency. Interestingly, the war for talent is a top priority for non-life, along with navigating sustainability and climate change, while life remains focused on navigating sustainability and climate change and leveraging the Internet of Things (IoT).
"With a high likelihood of the prolonged low interest rate environment continuing, European insurers need to continue reducing their dependency on investment income for profitability. They will also need to maintain a strong focus on cost efficiency, and selectively invest in digital transformation and talent reskilling to enable new business models and unlock growth."
For more information and to download the report, visit EY Insurance Outlook 2020.
Notes to editors
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About the report
The EY 2020 Insurance Outlook report was developed based on collective sector know-how, virtual workshops with insurance leadership across the globe, a formal internal survey of EY insurance professionals, and inputs from select clients and external analysts.
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