Property/casualty face uncertainty about how they’ll fare in 2017 for a variety of reasons, but there are four ways the sector can boost its odds for success, a new EY report argues.
Insurers can drive profitable growth if they focus on customer-driven innovation, embrace technology as a driver for top- and bottom-line performance, place cyber risk high on their agendas, and rethink plans they have in place to attract, develop and keep talent, the report concludes.
Moving ahead with these four recommendations is important, the EY report notes, in part because of the timing. With the election of Donald Trump as U.S. president, economic prognosticators are struggling to make their 2017 predictions for the property/casualty insurance industry. Uncertainty remains about how the sector will fare in the year ahead because of unknowns ranging from possible economic and regulatory changes, to advances of technology and the growth of InsurTech, according to the report.
On top of that, the incoming Trump administration “introduces the likelihood of further economic and regulatory change,” the EY report asserts. “With the industry in flux, this is the right time for CEO?s to think through their future business strategies.”
Here are EY’s 2017 recommendations in detail:
- Focus on customer-driven innovation. EY said that customers should quicken development of new products and business models, and stay customer-centric while doing so. What’s more, companies will gain in this area if they nurture a culture of innovation, EY said. “It requires embracing change at the top, staying focused on evolving customer needs, and taking a test-and-learn approach that accepts occasional failure,” the report concludes.
- Use technology to improve performance, both top- and bottom-line. Some ways this can happen include using robotics to automate insurance processes and streamline back-office operation, a move that can drive cost savings. Advanced analytics and embrace of both smart technologies and InsurTech can also help.
- Put “addressing cyber risk” high on the agenda. EY warns that cyber risks will “increase exponentially” in 2017 as cyber attackers grow more sophisticated and digital technology is used more broadly. With this in mind, EY recommends carriers build and launch a “comprehensive cyber risk management strategy.”
- Rethink how you plan to attract, develop and keep talent. EY wants carriers to think ahead, identifying trends such as what tasks could be handled by robots and technology versus those that will still require people. Companies would also do well to master the “millennial mindset” as they become a greater part of the U.S. workforce.”
The full EY report is called “2017 U.S. property-casualty insurance outlook.”