Technology Innovation Identified as Top Growth Opportunity for (Re)insurance Industry in 2017, According to Guy Carpenter Annual Market Pulse Survey
Technology innovation will provide the biggest growth opportunities for (re)insurers in the year ahead, according to a survey released today by Guy Carpenter & Company. Now in its fifth year, the annual survey polled executives from insurance and reinsurance companies during the 2016 Property Casualty Insurers Association of America (PCIAA) Annual Meeting held in Dallas, Texas. The goal of this year’s survey was to identify the top opportunities and threats to profitable growth in the year ahead, as well as examine the most significant disruptive forces impacting the industry.
Forty-two percent of those surveyed believe technology innovation represents the greatest opportunity to grow their business in 2017, followed by new products (25 percent), new geographic markets (13 percent), talent acquisition (12 percent) and M&A (8 percent). Thirty-six percent of respondents cited the potential for a financial recession as the emerging risk that will be the biggest threat to profitable growth in the year ahead. Meanwhile, one-in-three professionals ranked cyber as the most threatening emerging risk, followed by technology risks (11 percent), climate change (11 percent) and terrorism (9 percent).
“One of the most important findings we can take away from this year’s survey is the significant growth opportunity that technology innovation continues to bring to the (re)insurance industry,” said Tim Gardner, CEO of US Operations for Guy Carpenter. “The industry must be prepared to not only understand and manage the risks associated with these rapid advancements, but to also utilize these innovations to create actionable business intelligence and realize profitable growth opportunities.”
Thirty-eight percent of those surveyed viewed the continued rise of big data as the market force that will cause the most disruption in the (re)insurance industry over the next five years. Other significant market-changing forces include the speed of technological innovation (29 percent), the aging population (15 percent), Millennials (13 percent) and expanding urbanization (5 percent).
Looking ahead to 2017, 21 percent of professionals see regulatory and rating agency changes as the biggest threat to plans for profitable growth. Seventeen percent of respondents are concerned about global economic and political uncertainty; 16 percent fear operational inefficiencies; and 10 percent are most concerned about catastrophe/non-cat losses.
“Insurers are facing an increasingly complex market that will require them to be nimble and innovate in order to remain competitive,” said Mr. Gardner. “At Guy Carpenter, we are committed to investing in new solutions and industry leading technologies that will help our clients navigate this evolving landscape and grow their business, profitably.”
About the Survey
The survey of 107 insurance and reinsurance professionals was conducted by Guy Carpenter at the PCIAA Annual meeting held in Dallas, Texas on October 23 to 25, 2016. The 2015 survey polled 110 professionals.