Results come despite many feeling global economy is unlikely to improve
Some 90% of insurance chief executives anticipate revenue growth over the next 12 months, according to PwC’s Global CEO Survey, despite just 15% believing that the overall economy will improve.
Nearly one-quarter of insurance chief executives expect the global economy to decline over the next 12 months, down this time last year when nearly half expected further deterioration.
Recession in the US and falling growth in China pose the greatest risks for businesses, are considered more likely and damaging scenarios than a break-up of the eurozone.
PwC UK insurance leader Jonathan Howe said: “The insurance industry is facing significant challenges and opportunities. Trajectories of growth in different parts of the world are diverging, customers are demanding more transparent and accessible products, technology is revolutionising risk analysis and customer profiling, and the speed of change is putting existing business models at risk.
“The insurers that come out on top will focus keenly on the customer and have a superior capacity for innovation and reinvention. They’ll be able to anticipate change and how it affects them, as well as be nimble enough to quickly capitalise on emerging opportunities.”
Insurance chief executives consider the availability of talent as the biggest threat to their immediate growth prospects, although surprisingly, less than 30% view filling talent gaps as a key investment priority.
Competition over pay is still strong, with nearly three-quarters of industry leaders feeling the need to at least match the compensation packages offered by peer organisations to retain top talent. But 60% are concerned about the increasing tax burden, indicating perhaps that sustaining this compensation model will be difficult.
More than 80% of insurance chief executives said that risk should be factored into performance evaluation and pay, while one-third have already changed the way they set executive pay in response to shareholder and public pressure.
Some 55% of insurance chief executives expressed concern about a lack of trust in the industry, a higher percentage than bankers. More than 60% of respondents are looking at how to strengthen their culture of ethical behaviour, including defining the right behaviours and reinforcing mechanisms such as changes in hiring practices, organisational design, development programs, performance management and rewards.
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