2023 insurance outlook
Global insurance industry at a crossroads to shaping long-term success
Published: 15 November 2022
Necessity has indeed been the mother of reinvention for the insurance industry these past few years, as most carriers were remarkably adaptive and resilient in overcoming obstacles raised by the pandemic. This was thanks in part to all the new technology and talent put in place to upgrade systems and capabilities before COVID-19 hit. But it was also likely due to a change in perspective from what might be possible or useful at some point, to what had to be altered immediately—often under the most trying of circumstances.
- Insurers are facing a host of macroeconomic and geopolitical challenges likely to inhibit growth and profitability—including the looming threat of global recession, continuing fallout from Russia’s invasion of Ukraine, and lingering COVID-19 concerns.
- However, insurers that effectively transitioned during the pandemic to a remote workforce, as well as virtual customer and distributor engagement, could be better positioned to capitalize on a more agile digital infrastructure in meeting evolving expectations for customized products, channels, and services.
- In setting strategic plans, investment priorities, and budgets, insurers should therefore strive to maintain the momentum of creative adaptation established over the past few years, accelerating upgrades in systems, talent, and culture while becoming increasingly proactive, innovative, and customer-centric.
- While technology and resulting improvements in risk selection and pricing are likely to remain the primary drivers of improved bottom-line performance, insurers should expect to be increasingly judged by stakeholders on their response to broader sustainability priorities such as climate risk, diversity and inclusion, social equity, and transparent governance—all of which could become competitive differentiators in the battle for talent, investors, and market share.