To onlookers, CEOs at the top companies may seem to have it made with notoriety, respect among their peers and sizeable salaries compared to most. However, the reality of the pressures of the job can be much different – and it seems insurance CEOs have more on their mind than most.
PwC recently launched its global CEO survey, which polled 95 insurance CEOs across 39 countries and, according to the results, they feel more threatened than leaders of sectors including banking, healthcare, entertainment and media.
Unsurprisingly, among their list of fears is the potential for technological disruption. We recently examined the issue of robots taking jobs from brokers and it seems CEOs fear that tech could have a widespread impact on the industry, with 83% of insurance CEOs citing it as a threat to growth – a leap from 69% one year earlier. Indeed more than a quarter of those surveyed, 28%, believe technology will completely reshape competition in the industry over the next five years.
However, as concerning as technological advancements may be, over-regulation was top of the list – concerning 95%of insurance leaders around the globe. Other threats identified were uncertain economic growth (84%), social instability (75%), geopolitical uncertainty (74%) and the future of the Eurozone (72%).
Meanwhile, over half of insurance leaders globally (60%) believe it is becoming harder for them to compete in an open global marketplace amid moves toward more protectionist national policies.
Industry leaders are also concerned about shifting customer behaviour, as 78% of CEOs say this threatens growth (up from 64% last year). In order to adapt, insurers need to ensure they have a diverse workforce representing their customer base but 83% of insurance CEOs see a lack of availability of key skills as a threat to business growth.
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Yet despite these factors, insurance CEOs are generally optimistic about their companies’ growth prospects with 81% of those surveyed confident they can achieve revenue growth over the coming year – and even though technology presents its concerns, it clearly offers opportunities too, with 61% saying they are exploring the benefits of humans and machines working together to ensure their workforce is fit for the future.
“The optimism shown by insurance CEOs for continued growth shows how the speed of technological change can be turned into a great opportunity,” said Jim Bichard, UK insurance leader at PwC. “As customers demand more interactive and transparent interactions with their insurers, partnering with start-ups to learn new ways of working enables the sector to tap into a wealth of different experiences.
“By engaging with these new entrants to the market and simultaneously rethinking their in-house talent strategies, companies are waking up to the fact that a smart, diverse workforce will be their secret weapon. Insurers can reap the benefits of being proactive in disrupting themselves as a way of combating perceived external threats to growth such as regulation.”
Elsewhere, following a wave of industry megadeals in late 2015/early 2016, over a third (35%) of insurance CEOs say they are planning new M&A activity in the next 12 months to drive growth and profitability.
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