The PricewaterhouseCoopers 22nd annual Global CEO Survey included insights from 3,200 CEOs to look at specific industry trends and provide strategic recommendations for the future. In the Insurance industry, the impact of technology changes combined with evolving consumer behavior has created disruption.
However, technology fears are turning into optimism. For example, when asked about Artificial Intelligence (AI), more than 80% of insurance CEOs said that AI is already part of their business model or would be in the next couple of years.
The focus has been on improving the customer experience and cost reduction but is starting to impact business models. Per the report, “The increasing use of sensors, AI and machine learning in combination has affected the practices of loss anticipation and compensation, moving them towards more proactive risk detection, intervention and prevention.” We’re already seeing signs of adoption in wearable devices providing monitoring and alerts as well as Internet of Things (IoT) technologies that provide real time data.
These advancements are improving customer experience and engagement, which is in turn strengthening policyholder trust. As the report highlights, “Consumers want choice, flexibility, simplicity, and personalization in what they purchase, the channels they use, and how they interact with carriers.”
Industry leading insurance companies are innovating at a faster pace than their counterparts through collaboration, enabling them to more quickly introduce new products and services. Another advantage for consumers is the introduction of modular options that are simple to understand and access digitally.
To continue making headway, insurance companies need to consider their decision making and work practices. While automation can improve offerings, creativity, leadership, and most importantly, empathy, are human traits that can be strong differentiators. This may be why 80% of insurance CEOs are concerned about the impact of skills shortage on their growth prospects.
In looking ahead, five priorities are called out in the report.
- Reimagine your business: Understand what your company does better than any other and look at “openings for innovation in the risk-prevention and customer experience.”
- Choose the ecosystem you want to serve: As technology opens up new avenues of growth, determine which “commercial ecosystem best plays to your strengths and relationships.” Once you have made a decision, you’ll need to engage them appropriately to build loyalty.
- Simplify legacy systems to drive efficiency and create capacity for growth: It’s important to manage existing business models while developing innovative new approaches in the short term. However, you’ll also need to start to simplify, “selectively decommission and shift legacy capabilities to new capabilities.”
- Focus on talent development: Re-training the best and brightest will drive transformation. “It’s more likely that elements of jobs will be automated and augmented.” Thus, you will need to understand how roles will change and how employees can up-level their work.
- Accelerate execution: With the pace of change quickening, change management capabilities will become central to success. Eliminate silos that delay information sharing and adopt an agile approach.
“Insurance is emerging as an innovator. There’s currently a unique opportunity for companies to be distinctive, as trepidation about disruption turns to optimism. The industry is ripe for change and the companies out in front are in a position to take advantage of an increasingly open and connected landscape.”
For more information on insurance industry trends and related executive recruiting support, send us a note. Our executive recruiters in Chicago, Denver, Seattle and St. Louis are ready to assist you with your search needs.