Despite an incredibly turbulent period marked by high inflation, political tensions, and fears of a recession, America’s insurance CEOs are very positive about the industry’s immediate outlook, a new survey by multinational professional services and auditing firm KPMG has found.
“CEOs are balancing the priorities that have been foundational to our CEO Outlook and looking to turn risk into opportunity by focusing on technology, ESG and talent,” said KPMG US chair and CEO Paul Knopp.
The report found that 90% of insurance CEOs in the US are confident in the growth prospects of the industry over the next three years. It also noted that 59% described their organizations’ appetites for M&A as ‘high,’ which means they’re likely to acquire more businesses for growth within the next three years.
When asked which economic factors were their top concerns, insurance CEOs identified rising interest rates, inflation, the anticipated recession, and the ongoing pandemic. In addition, 90% of CEOs said that they are anticipating a recession in the next 12 months, while 54% said that the recession would be “mild and short.” 79% of insurance CEOs have agreed that a recession is expected, and that they have prepared for it.
America’s insurance CEOs are also closely monitoring the evolving regulatory environment when it comes to their environmental, social, and governance (ESG) agenda, KPMG found. Many have indicated that increased and/or frequently changing regulations will be the biggest challenge for growth over the next three years.
Most CEOs also said that taking a more proactive approach to societal issues (such as increased investment in a living wage, etc.) will be the key driver to accelerate their ESG strategies. When it comes to diversity, equity, and inclusion, 78% of insurance CEOs said that they agree that as business leaders they have a responsibility to drive greater social mobility.