This IDC Financial Insights report predicts the top 10 principal macro, business, operational, and technology strategic initiatives for global insurers to thrive in the current new normal economic environment. Given the current climate of protracted slow growth and hyper-competition, they include a combination of high-level as well as specific strategic imperatives needed to remain in the game.
This report — our inaugural report aggregating comments for the global insurance industry — consolidates our latest research, internal brainstorming sessions, and perspectives gleaned via interactions with insurers and technology vendors across the globe through the course of the past 12 months.
"With increased volatility and complexity, the markets have fundamentally changed, and one cannot expect the future to resemble the recent past. Businesses might be hard pressed to return to the normal 'business as usual' mode, and as a result, insurers will have to react by responding more quickly to both opportunities and threats, and by making efforts to identify trends and anticipate future changes," remarked Li-May Chew, CFA, associate research director for IDC Financial Insights' Worldwide Insurance Advisory Service.
"On the macro front, faltering global expansion and a low interest rate environment are reducing investment yields and undermining profitability. This is driving international insurers to expand into emerging Asia and Latin America to support profitable growth and revisit alternative revenue streams from specialty lines such as microinsurance and takaful insurance. There will also be more concerted efforts around online modes such as the Internet, with forays into social media and mobile initiatives."
"The crisis further instigated a thorough regulatory review, and we see more onerous regimes like Solvency II and FATCA inevitably leading to higher compliance costs. Nonetheless, despite the lackluster economic environment, we predict aggregated insurance technology spending rising 3.1% in 2013, with investments focused around process and enterprise management tools, analytics and CRM, channel management, core applications, and compliance and risk management."