2019 Insurance Outlook

Insurers benefit from growing economy, but longer-term challenges call for transformation

To maintain growth momentum in 2019, the insurance industry will need to sharpen its focus on improving operational efficiency, boosting productivity, and lowering costs with new technology and talent transformations, while customizing products and services to meet evolving consumer demands in the emerging digital economy. This can potentially be realized by prioritizing the following themes in strategic planning over the next 12-18 months.

Theme one: Technology- Cloud set to become the default option for tech deployment


Ÿ   Employ phased migration, applying scoring rules for legacy systems to identify correct sequence of move to cloud.

Theme two: Talent- Emerging technologies, open talent economy transforming workforce


  • Drastic changes in the economy and labor force drive innovation in recruitment, retention, and work environment.


Theme three: Product development- IoT, InsurTech can help launch a new generation of flexible policies


  • Consumer increasingly want more control over their specific coverage.
  • Back or acquire an InsurTech offering new, more relevant coverages, capabilities, and platforms, unburdened by traditional policy categories or annual commitments.


Theme four: Mergers & acquisitions- Economic, strategic factors may prompt more M&A activity, while discouraging others


  • Rising interest rates make life and annuity insurers increasingly attractive assets to financial investors.


Theme five: Regulatory outlook- Focus broadens from solvency to market conduct


  • Aim to bolster utility and value of annuities in product innovation; increase combination products, including death or long-term care benefits, as well as simpler products targeted to younger consumers with low take-up rates.
  • Review and adjust compliance structures; adopt the use of regtech to enable continuous oversight and management of the sales process.


Theme six: Regulatory- Cyber risk regulations expanding globally


  • NAIC cybersecurity regulations are based on NYDFS rules, enabling those compliant with that standard to be deemed complaint with the NAIC model.

Theme seven: Data Privacy- New privacy rule put insurers in the hot seat


  • GDPR violations fines can be up to 4% of a company’s worldwide net sales.
  • California’s law, effective January 1, 2020, gives covered companies 30 days to fix an alleged violation; otherwise, consumers may pursue a private right of action in certain circumstances, and the state’s attorney general can pursue civil penalties.

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