As disruption mounts, insurers and reinsurers are facing huge strategic challenges in maintaining competitiveness, driving change and delivering all-important growth. Perceived wisdom has been that these are mutually exclusive goals, but in this report PwC Strategy& sets out why they can coexist if organisations are committed to being fit for growth
The industry will undergo significant, disruptive change
The insurance industry globally continues to be the most disrupted of any sector3. In our work with (re)insurers, we’ve noticed anxiety about
the technological changes coming from current competitors, start-ups, and Silicon Valley that are reshaping the industry. When asked them
what posed the greatest threat to their operating models, the most popular response (44% of all Fit for growth survey respondents), was “market disruption or the use of new technology.” Second on the list was “changing customer needs and offerings from new market entrants” (24%). These responses outweighed concerns about lack of customer insight, availability of talent, regulatory change, and the economic environment combined.
Need to grow
Most companies know that growth is critical to long-term success. Most are somewhat or very confident in their ability to grow, with many having growth targets that far outpace those being achieved in the industry as a whole. We therefore expect there to be haves and havenots. The haves include companies that believe they can outperform competitors through better execution of the tried-and-true strategies that are common in the industry. We expect have-nots to have the self-awareness to know that they are not out in front of the market and are therefore waiting for the storm to pass. As we expected, not all carriers are pursuing growth at all costs. Only 30% of FFG survey respondents said that top line growth was their primary strategic focus. However, only 9% were willing to admit that growth was of minimal focus, while the remaining 60% of carriers took a more balanced view.