My first post in this set of blogs about the Accenture 2015 Global Structural Reform Study looked at how global structural reform (GSR) is presenting an even more complex ecosystem for insurers. Our research finds that the sheer volume of GSR regulations and the complexity of changes they demand is driving significant investment in talent and technology as insurers organize their responses.
Over half of the financial institutions we surveyed are forecasting investment of over $100 million for technology, and over $100 million in non-technology-related spend. This investment is prompted, in part, by a forecasted increase in headcount, either as contingent staff to deliver required change activity or as new, permanent staff that will run a much-changed business.
This reported investment raises the stakes for senior management to help provide responses that are appropriate and focused. We suggest there is a need for insurers to further validate whether their investment plans would fully account for the strategic implications of GSR.
Delivering long-term value for the financial institution will require a shift beyond a point-regulation approach to one that considers other competing regulations or broader forces in the marketplace. In our view, GSR regulations are adding further complexity to a landscape already beset with macroeconomic disruptions.
Pressure on margins, customers expecting resources to be “fingertip-ready” and industry disruptions from the rise of digital technology and new entrants all present a volatile landscape. Making this landscape harder to navigate with ongoing GSR regulations creates a conundrum that institutions need to solve if they are to be viable in the long term.
In my final post, I’ll explore strategic principles that will help insurers navigate this difficult landscape.