Impetus for Innovation Growing Among Insurers
According to a new survey of insurers and reinsurers, technology investments top want lists, new products seen as biggest opportunity for growth.
Insurance Networking News, November 14, 2012
More than a third of respondents said that if given a blank check to invest in their firm, they would spend the extra money on bolstering technology, according to a new survey of 110 insurance and reinsurance professionals conducted by Guy Carpenter at the PCI Annual Meeting.
“The continued thirst for innovation shows that there is a significant opportunity within the industry to evolve the way insurers use technology to holistically assess risk, identify new growth opportunities, enhance the customer experience, and translate big data into actionable business intelligence,” said Andrew Marcell, CEO of U.S. Operations for Guy Carpenter. “Insurers will need to seize every competitive advantage possible in order to reach their long-term goals for profitable growth and navigate the increasingly complex business challenges that 2013 will undoubtedly bring.”
Of those surveyed, 34 percent list new products as their biggest opportunity for business growth in 2013, followed by new geographic markets (29 percent), new distribution (16 percent), acquisition of new talent (14 percent) and strategic M&A (7 percent). With historically low investment returns and lingering weakness in the economy, the report asserts that insurers are under pressure to drive profitability through solid underwriting results—36 percent listed undisciplined/unprofitable underwriting as the biggest threat to growth.
When asked what capital sources they would be utilizing in 2013, an overwhelming majority of survey respondents (78 percent) said they would be leveraging traditional reinsurance vehicles. Another 16 percent indicated that they would be using alternative capital sources, such as insurance-linked securities, catastrophe bonds and collateralized reinsurance vehicles in the year ahead.
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