Seventy-nine percent of insurance executives are optimistic about their firms’ prospects.
I confess to enjoying research reports a lot, both those that Accenture produces and external ones. Getting a hold of some hard data is always a good thing—we all need a reality check—and then there’s the endless fascination of trying to work out what it is saying.
One such recent report is The Economist Intelligence Unit’s CEO Briefing 2014 for the insurance industry. This briefing is based on survey of 86 insurance C-suite directors in 19 countries and so it contains lots of interesting data, but sometimes my perspective differs from that of the authors. I’d like to explore some of the key data points and what I think they mean.
Overall, the finding that sets the tone for the whole report is the cautious optimism that insurance executives seem to be feeling. Like their peers in other industries, they tend to be bullish about the global economy, their home countries and the industry itself—in fact, they are slightly more optimistic about their own organizations than the global average for all the survey respondents representing all industry sectors, and also more than their banking colleagues: 79 percent of insurance executives versus 76 percent in banking are optimistic.
Part of that optimism surely stems from the fact that many insurers are seeing opportunities based on strengthening global demand for new products and new geographical markets opening up. AIG’s president and CEO, Robert Benmosche, also alludes to a possible convergence between life and property and casualty within personal lines, an intriguing idea that deserves some further thought. It also makes me wonder about the possibilities of convergence with the whole health insurance and services industry.
The fact that interest rates are set to rise is also surely responsible for the buoyancy, given the impact these returns have on insurers bottom line. This is particularly helpful news because it seems like there is some downward pressure on underwriting prices as customers flex their muscles.
The growing power of the customer is something I will return to in these blogs, particularly because I wonder (based on this research, and my own observations) whether insurers yet realize just how powerful and insistent their customers now are. They want personalized services from their insurers, and they will switch providers to get it, as the following graph from the 2013 Accenture Consumer-Driven Innovation Survey shows.
Next time, I’ll look at some of the negatives that insurance executives are grappling with.
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