2022 insurance industry outlook

Digital and talent transformation accelerating as insurers adapt for postpandemic growth

2022 insurance industry outlook

by

Gary Shaw

2021 saw widespread vaccine deployment and easing of pandemic-related restrictions—important catalysts that helped rebuild confidence among people and businesses alike, while fueling economic recovery. But the battle with COVID-19 is far from over, and a level of uncertainty will likely persist— perhaps indefinitely. Might this undermine the insurance industry’s outlook heading into 2022? Our research found that despite ongoing COVID-19 concerns, insurers in general expect more rapid growth next year—although nonpandemic challenges around regulation, talent, sustainability, and evolving consumer preferences may present speed bumps. A lot will depend on how effectively insurers manage their investments in people and emerging technologies. Flexible work models, balancing automation with the need to maintain a human touch with customers and being more proactive in bolstering stakeholders’ trust should be among the industry’s strategic priorities.

Here are some of the key findings from Deloitte’s 2022 insurance industry outlook.

Insurers are buckled up to accelerate growth in 2022

Despite lingering concerns about COVID-19 variants, most insurers expect an accelerating economic recovery and additional digital technology investments in 2022. About one-third of the survey respondents expect revenues to be “significantly better” next year. The demand for insurance is expected to keep rising worldwide (figure 1).

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Yet the ride could be bumpy

The challenges insurers face range from economic hurdles such as the potential for sustained inflation; to sustainability concerns including climate risk, diversity, and financial inclusion; to rapidly evolving consumer product and purchase preferences.

Attracting (and retaining) talent in an evolving hybrid work environment will be key

Future of work considerations have also multiplied as carriers seek to create flexible return-to-office strategies while simultaneously struggling to retain and recruit high-level talent in a very competitive job market—particularly for those with advanced technology and data analytics skills.

Insurers need to find ways to balance technology adoption with maintaining the human touch

Insurers are increasingly dependent on emerging technologies and data sources to drive efficiency, enhance cybersecurity, and expand capabilities across the organization. However, most should also focus on improving the customer experience by both streamlining processes with automation as well as providing customized service where needed and preferred.

With the pandemic have come opportunities to boost stakeholder trust

On a more fundamental level, many carriers can consider taking steps to bolster trust among stakeholders to boost retention and profitability. This might be achieved in part through greater transparency in how insurers collect and utilize personal data. They can also become more proactive in seeking comprehensive solutions to big picture societal problems—such as mitigating the financial impact of future pandemics and closing coverage gaps for natural catastrophes.

Interested in a deep dive?

Download the full 2022 insurance industry outlook to learn more.

This report was coauthored by Sam Friedman, insurance research leader; Michelle Canaan, insurance research manager; Nikhil Gokhale, insurance research manager; and Prachi Ashani, insurance research analyst, all from the Deloitte Center for Financial Services.

The Center would like to thank the Deloitte professionals who provided additional insights and perspectives in the development of this outlook, including:

Neal Baumann (Industrywide trends)

Bryan Benjamin (Accounting rules)

Julie Bernard and Daniel Soo (Cybersecurity)

George Hanley and Howard Mills (Regulation)

Eli Katz (Tax)

Anuj Maniar, Kelly Cusick, Andy Ferris, Jeff Huddleston, and Elvar Snorrason (Marketing, distribution, and product development)

Rohit Malhotra, Ayan Bhattacharya, and Akash Tayal (Technology)

Mark Purowitz, Doug Sweeney, and Doug Welch (M&A)

David Sherwood (Regulation/ESG/climate risk)

Kristen Sullivan (ESG/sustainability/climate risk)

Tina Witney and Andy Liakopoulos (Talent)

Cover art by: Willy Sion

Deloitte Insurance Services

Deloitte’s insurance group brings together specialists from actuarial, risk, operations, technology, tax and audit. These skill sets, combined with deep industry knowledge, allow us to provide a breadth of services to life, property and casualty, reinsurers and insurance broker clients.