Insurance firms optimistic about growth prospects
Focus on emerging markets of Latin America, Asia for expansion.
Survey highlights: 75% of insurance CEOs are concerned about lack of stability in capital markets. 87% of insurance CEOs are planning to step up engagement with users of social media, more than traditional media (64%). DESIGN: JAMAL KHURSHID
KARACHI:
CEOs of insurance firms are upbeat about their companies’ prospects worldwide, as nearly 90% say they expect revenue growth in the future, according to a recent survey carried out globally by PricewaterhouseCoopers (PwC) – an international consulting group that operates in Pakistan through AF Ferguson and Company.
Key findings in the international insurance industry are part of PwC’s 16th Annual Global CEO Survey in which 1,330 CEOs were interviewed from 68 different countries.
Overseas opportunities
The focus on expansion in a range of largely under-penetrated emerging markets is reflected in the fact that Latin America (88%) tops the list of the regions earmarked for growth over the next 12 months, with most parts of Asia also scoring more than 80%. However, noticeably fewer insurers are targeting growth opportunities in Africa (67%) than their counterparts in banking (88%).
Industry in transformation
The survey stated that the global insurance industry is undergoing a “transformation in customer expectations,” as 58% of industry leaders express concerns about the shift in consumer spending and behaviour.
As the changes in customer expectations reshape the key competitive battlegrounds within the industry, nearly 90% of insurance CEOs are planning to change their strategies for managing customer growth, loyalty and retention. Nearly 40% CEOs are anticipating major changes.
Developments in technology are also changing how products are designed, underwritten and distributed and could open the door to new entrants. More than 80% of CEOs are planning to increase investment in technology and more than 60% plan to develop their capacity for innovation.
Surprisingly, most industry leaders say they are not concerned about the speed of technological change or the threat from new entrants.
Competition for talent
The CEOs see the limited availability of key skills as the “biggest threat” to growth. Nearly 80% are planning to change their strategies for managing talent as a result, with nearly 30% seeing filling talent gaps as one of the top three investment priorities.
Competitive culture
Cutting across these competitive developments is the need for a cultural shift as insurers strive to rebuild public trust: 55% of CEOs are concerned about lack of trust in the industry, the survey said.
More than 60% of CEOs are developing a framework to support a culture of ethical behaviour. An equal proportion of CEOs are stepping up investment in managing their corporate reputation.
Government influence
Ninety-five per cent of CEOs say that governments and regulators influence their strategy, almost as many as customers (99%). Understandably though, far fewer CEOs are looking to engage more closely with the government (76%).
Concerns over the protectionist tendencies of national governments are rising again, as 47% of CEOs cite such concerns. This is mirrored in concerns over tax – 57% of CEOs express such concerns. Similarly, governments’ response to debt and fiscal issues also worries the CEOs (73%).
Published in The Express Tribune, April 28th, 2013.
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CEOs of insurance firms are upbeat about their companies’ prospects worldwide, as nearly 90% say they expect revenue growth in the future, according to a recent survey carried out globally by PricewaterhouseCoopers (PwC) – an international consulting group that operates in Pakistan through AF Ferguson and Company.
Key findings in the international insurance industry are part of PwC’s 16th Annual Global CEO Survey in which 1,330 CEOs were interviewed from 68 different countries.
Overseas opportunities
The focus on expansion in a range of largely under-penetrated emerging markets is reflected in the fact that Latin America (88%) tops the list of the regions earmarked for growth over the next 12 months, with most parts of Asia also scoring more than 80%. However, noticeably fewer insurers are targeting growth opportunities in Africa (67%) than their counterparts in banking (88%).
Industry in transformation
The survey stated that the global insurance industry is undergoing a “transformation in customer expectations,” as 58% of industry leaders express concerns about the shift in consumer spending and behaviour.
As the changes in customer expectations reshape the key competitive battlegrounds within the industry, nearly 90% of insurance CEOs are planning to change their strategies for managing customer growth, loyalty and retention. Nearly 40% CEOs are anticipating major changes.
Developments in technology are also changing how products are designed, underwritten and distributed and could open the door to new entrants. More than 80% of CEOs are planning to increase investment in technology and more than 60% plan to develop their capacity for innovation.
Surprisingly, most industry leaders say they are not concerned about the speed of technological change or the threat from new entrants.
Competition for talent
The CEOs see the limited availability of key skills as the “biggest threat” to growth. Nearly 80% are planning to change their strategies for managing talent as a result, with nearly 30% seeing filling talent gaps as one of the top three investment priorities.
Competitive culture
Cutting across these competitive developments is the need for a cultural shift as insurers strive to rebuild public trust: 55% of CEOs are concerned about lack of trust in the industry, the survey said.
More than 60% of CEOs are developing a framework to support a culture of ethical behaviour. An equal proportion of CEOs are stepping up investment in managing their corporate reputation.
Government influence
Ninety-five per cent of CEOs say that governments and regulators influence their strategy, almost as many as customers (99%). Understandably though, far fewer CEOs are looking to engage more closely with the government (76%).
Concerns over the protectionist tendencies of national governments are rising again, as 47% of CEOs cite such concerns. This is mirrored in concerns over tax – 57% of CEOs express such concerns. Similarly, governments’ response to debt and fiscal issues also worries the CEOs (73%).
Published in The Express Tribune, April 28th, 2013.
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