New products represent the biggest growth opportunity for (re)insurers in the year ahead, according to a new survey from global risk and reinsurance specialist Guy Carpenter & Co.
The fourth annual survey polled 110 insurance and reinsurance executives at the 2015 Property Casualty Insurers Association of America’s (PCIAA) annual meeting. The survey examines which areas are most in need of innovation as well as the emerging risks respondents believe will impact their plans for growth in 2016.
Nearly half (48 percent) of the survey respondents said they believe new products present the most significant opportunity to expand their business in 2016, up from 40 percent in 2014. This is followed by new geographic markets (24 percent), mergers and acquisitions (14 percent), talent acquisition (9 percent), and new distribution channels (5 percent).
Cyber once again claimed the top spot as the most threatening emerging risk, jumping to 65 percent from 40 percent in 2014. Climate change was ranked by 1-in-4 respondents as the most threatening emerging risk, followed by terrorism (10 percent).
Nearly half (49 percent) of survey respondents noted cybersecurity as an area most in need of innovation, followed by big data management (27 percent), predictive analytics (14 percent) and catastrophe modeling (10 percent).
Undisciplined/unprofitable underwriting ranked as the leading threat to plans for growth in the year ahead, chosen by 33 percent of respondents. Twenty-four percent of respondents cited concerns around catastrophe/noncatastrophe losses as the biggest threat to plans for growth, up from 19 percent in 2014. Respondents are also concerned about operational inefficiencies (19 percent), global economic uncertainty (14 percent), and regulatory and rating agency changes (10 percent).
Source: Guy Carpenter & Co.