Nearly half of 400 insurance executives responding to a recent survey said their current priorities center on improving profitability rather than growing their businesses.
Forty-eight percent of participants reported they are prioritizing profitability, as opposed to 13 percent who stated growth metrics take precedence, according to a report titled “Insurance Operations in a Changing Industry, published today by Earnix, a global provider of intelligent SaaS solutions for insurers and banks.
The survey, conducted by Market Strategy Group, LLC on behalf of Earnix in June 2023, included global insurance executives from the United States, Canada, Europe, and Australia among the 400 respondents whose roles and departments varied among C-level, IT, analytics, product, and underwriting roles. More than half, 241 respondents, are executives for property/casualty personal lines insurers, while 78 represent P/C commercial carriers.
In addition to strategic priorities, survey questions also focused on macroeconomic challenges, climate change, cybersecurity concerns, the effects of post-pandemic workforce dynamics, changing industry regulation, and technology adoption.
Among the key findings on these topics, Earnix reported:
- 35 percent of C-suite executives selected macroeconomic challenges as one of the three top trends impacting their area of the company over the last two years; executives in areas such as actuarial pricing and underwriting selected “growing cyber risks” above macroeconomic trends.
- On a 10-point scale, North American insurers rated the “anticipated significance of climate change on the operations in the next decade” at 8.06.
- Insurers said the ability to attract and retain talent is a significant challenge, with large carriers giving this a score of 8.05 (also on a 10-point scale)
Expanding on workforce challenges, Earnix found different priorities in terms of skills they are looking for in new employees. IT executives and C-suiters put the most attention on IT management skills, in contrast to actuaries and product executives who are most keen on acquiring talent with dynamic pricing skills.
As for artificial intelligence skills, C-suite executives ranked that second, behind IT management skills. Only analytics executives ranked AI skills first.
Referring to executives’ desires to increase profitability while dealing with the continued economic impacts of inflation, interest rates, supply chain breakdown, and similar factors, the Earnix report advises carriers to adopt new technology, including innovative approaches designed to create more effective rating and pricing strategies.
In a statement announcing the publication of the Earnix report, Aaron Wright, Director of Strategy, Earnix said, “Leveraging advanced data analytics capabilities and advanced technologies are crucial for insurers to implement predictive modeling, dynamic pricing, and other critical use cases, allowing them to survive and thrive in this period of upheaval.”
Nearly all survey respondents—98 percent—said they are planning to use predictive modeling.
Another takeaway on team dynamics found that executives surveyed ranked “increased collaboration” between functions as a top priority (ranked third on a list of workplace priorities), with one-third seeing collaboration as a top driver on innovation. “Yet there a significant gap when it comes to what is really happening inside insurers,” the report said. Only 28 percent said they believe cross-functional collaboration happens regularly; nearly three-quarters said it never happens (18 percent) or only on a ad-hoc basis (55 percent).
Underwriting executives reported the highest levels of regular collaboration with other functions (41 percent), followed by analytics executives (33 percent).