We had the pleasure of catching up this morning with Gary Shaw, Deloitte's new insurance practice leader. Gary identified a few of the market forces impacting Deloitte's clients:
[For our report on Gary Shaw's appointment see: Deloitte Appoints New Insurance Head .]
Need for Growth: "Insurers are not looking to buy business but rather are focusing on profitable growth. Companies are implementing risk adjusted profitability frameworks to ensure the right rate of return, getting the right balance around growth."
Regulatory Pressures: "Carriers are facing a range of regulatory compliance challenges, including everything associated with the globalization of the regulatory environment through Solvency II and Own Risk and Solvency Assessment (ORSA), both within the European regulation and the NAIC's Solvency Modernization Initiative. Attention to privacy and security related compliance issues have been heightened by recent prominent hacking attacks."
Business Model: "I know of no company that is not focused on their business model. Many companies have evolved over time, often through acquisitions, and have very much silted operations. They are now looking to leverage capabilities across the enterprise, developing best practices, enhancing operational efficiency and moving talent around the company."
Distribution Channel Evolution: "Evolving the distribution channel is a requirement. It's no longer sufficient to have one primary channel. The same customer may want to interact in different ways. Distribution is growing increasingly complex, and insurers have to implement the right structure, technology and third-party distribution capabilities."
Technology Investment: "When it comes to technology infrastructure, insurers have underinvested historically. We expect to see a continuing increase in technology investment across a large portion of our client base. There's been a big uptick in investment in operations and the back office, but there's a trend in using technology to sell insurance, and insurers thinking like a consumer service business in how they interact with customers. There's a great deal of momentum in using digital technology to augment or disrupt existing business models. That will require CIOs to be much more strategic and collaborative with marketing, sales and other aspects of the business."
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio