Technological Change and Cyber Risk Overtake Regulation as Top Risks for Insurers
(Thomson Reuters ONE) -
'Banana Skins' survey reflects industry risk perception
LONDON, May 30, 2017 (GLOBE NEWSWIRE) -- The global insurance industry's ability
to confront structural and technological changes is now the greatest risk it
faces, according to a new survey of insurers and close observers of the sector.
The CSFI's latest Insurance Banana Skins 2017 survey, conducted with support
from PwC, surveyed 836 insurance practitioners and industry observers in 52
countries, to find out where they saw the greatest risks over the next 2-3
years.
+---------------------------------------+
| Insurance Banana Skins 2017 |
| (2015 ranking in brackets) |
| |
| 1 Change management (6) |
| |
| 2 Cyber risk (4) |
| |
| 3 Technology (-) |
| |
| 4 Interest rates (3) |
| |
| 5 Investment performance (5) |
| |
| 6 Regulation (1) |
| |
| 7 Macro-economy (2) |
| |
| 8 Competition (-) |
| |
| 9 Human talent (15) |
| |
| 10 Guaranteed products (7) |
| |
| 11 Political interference (16) |
| |
| 12 Business practices (11) |
| |
| 13 Cost reduction (-) |
| |
| 14 Quality of management (12) |
| |
| 15 Quality of risk management (10) |
| |
| 16 Social change (20) |
| |
| 17 Reputation (18) |
| |
| 18 Product development (17) |
| |
| 19 Corporate governance (21) |
| |
| 20 Capital availability (22) |
| |
| 21 Complex instruments (25) |
| |
| 22 Brexit (-) |
+---------------------------------------+
Change management is at the head of a cluster of operating risks which have
jumped to the top of the rankings. The report raises concerns about the
industry's ability to address the formidable agenda of digitisation, new
competition, consolidation and cost reduction it faces, especially because of
rapidly emerging technologies which could transform insurance markets, such as
driverless cars, the 'internet of things' and artificial intelligence.
Cyber risk follows close behind, with anxiety rising about attacks on insurers
themselves as well as the costs of underwriting cyber-crime. Other major
concerns include the adequacy of insurer's internal technology systems and new
competition, particularly from the 'InsurTech' sector.
The next cluster of high-ranking risks, interest rates, investment performance
and macro-economic risk, shows that concern about economic instability remains
high. Although respondents acknowledged signs of growth, confidence in the
recovery is not strong for reasons as widely dispersed as the slowdown in China,
the risk of Trump-era protectionism, and populism in Europe. The risk of
political interference was seen to have risen sharply. However, Britain's exit
from the EU was seen to be a minimal source of risk for insurers, particularly
those without operations in the UK.
Regulatory risk, which has topped the last three editions of this survey, has
fallen out of the top five this year. This is largely because recent regulatory
changes are settling in to business as usual (e.g. Solvency 2), though the cost
and complication of regulation continue to be a concern.
The report shows that the industry's ability to attract and retain human talent
is a fast-rising concern, particularly to handle the digital challenge.
Conversely, an area of declining risk is the governance and management of
insurance companies. These were seen as high-level risks during the financial
crisis but have fallen sharply since, because of both initiatives from the
industry itself and regulatory pressure.
Overall, the climate for insurers is becoming more challenging, according to
respondents. The 2017 Banana Skins Index, which measures the level of anxiety in
the industry, is at a record high, while the industry's preparedness to handle
these risks has fallen from 2015.
David Lascelles, survey editor, said: "For the first time in six editions of
this survey, operating risks pose the greatest threat to insurers. Structural
and technological changes to the industry could upend traditional business
models. At the same time, insurers are grappling with a very difficult economic
climate, which helps explain why anxiety is at an all-time high."
Mark Train, PwC Global Insurance Risk Leader, comments: "Both the challenges and
opportunities presented by change underline the vital importance of being clear
about where you're best able to add value, and then being ruthless in targeting
investment and management time at these priorities. A key part of this 'fit for
growth' strategy is differentiating the capabilities needed to fuel growth,
'good costs' targeted for investment, from low-performing business and
inefficient operations, 'bad costs' targeted for overhaul or elimination."
Notes to Editors:
1. For further information, contact:
David Lascelles, CSFI
T:+44 (0)20 7621 1056 or +44 (0)7710 088658,
E: david(at)davidlascelles.com
Andrew Hilton, CSFI
T:+44(0)20 7621 1056
E: Andrew(at)csfi.org
Joost Blankenspoor, PwC
T: +31 (0)88 792 6596
E: joost.blankenspoor(at)pwc.com
2. The Insurance Banana Skins 2017 survey was conducted in January and February
2017 and is based on 836 responses from 52 countries. The breakdown by type of
respondent was:
%
Non-life 29
Life insurance 27
Composite 17
Reinsurance 7
Brokers 4
Other 16
3. The survey is the latest in the CSFI's long-running Banana Skins series on
financial risk. Previous Insurance Banana Skins surveys were in
2007, 2009 2011, 2013 and 2015. The report is prepared by the CSFI, which is
solely responsible for the editorial content, with support from PwC. It can be
downloaded from the CSFI website: www.csfi.org or from the PwC
website: www.pwc.com/insurance.
4. The CSFI (Centre for the Study of Financial Innovation) is a non-profit
think-tank, founded in 1993, which looks at challenges and opportunities for the
financial sector. It has an affiliate organisation in New York, the New York
CSFI.
5. PwC is a network of firms in 157 countries with more than 195,000 people who
are committed to delivering quality in assurance, tax and advisory services.
More information is available at the firm's website, www.pwc.com.
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: PWC Network via GlobeNewswire
Datum: 30.05.2017 - 01:01 Uhr
Sprache: Deutsch
News-ID 545030
Anzahl Zeichen: 8737
contact information:
Town:
New York
Kategorie:
Business News
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