2018年-德勤中国_2019InsuranceIndustryOutlook_40页_4mb

2019 Insurance Outlook Summary

Core Content

The 2019 Insurance Outlook provides an analysis of the insurance industry's position as it enters the year, focusing on economic conditions, technological advancements, talent strategies, product development, and M&A activity. The report highlights both positive trends and potential challenges, emphasizing the need for adaptation and innovation to remain competitive.

Main Points

Economic Outlook

• Positive Factors: Sustained economic growth, rising interest rates, and higher investment income are bolstering insurer results in 2018.
• US P&C Growth: US P&C premiums grew by 12.7% in the first half of 2018, with net income more than doubling to over $34B.
• Global Growth: Non-US insurance industries are also growing, though at a slower rate than the US, likely due to faster economic expansion in the US.
• Life Insurance Challenges: US life insurance and annuity (L&A) businesses have not fared as well as P&C counterparts, with limited growth in premiums and a decline in net income.
• Recession Risk: Concerns about a potential economic slowdown or recession by 2020 are rising, with a 30–40% chance of recession by late 2020.

Technology Trends

• Cloud Adoption: Cloud computing is becoming a key part of insurers' technology strategies. Over 70% of carriers already use cloud, and more are expected to adopt it for core systems and new applications.
• Benefits of Cloud: Cloud offers cost savings, scalability, flexibility, and speed, which are critical for adapting to the digital economy.
• Cloud Strategy: Insurers should develop a multiyear cloud strategy, focusing on phased migration and leveraging cloud capabilities for analytics and decision-making.
• Cybersecurity Concerns: With data moving off-site, cybersecurity is a growing concern. Insurers must ensure they maintain control over security policies in cloud environments.

Blockchain Trends

• Real-World Applications: 2019 is expected to see more blockchain applications in insurance, moving beyond proof of concept.
• Examples: AIA Hong Kong launched a blockchain-enabled bancassurance platform, while AXA introduced flight-delay insurance via a blockchain platform.
• Consortiums: Insurers are forming consortiums to share costs and enable cross-industry collaboration.
• Future Potential: Blockchain could reshape insurance operations and lead to wider adoption by 2020.

The Future of Work

• Talent Challenges: Insurers face a tight labor market, especially for tech, data science, and actuarial roles.
• Automation Impact: Robotic process automation and AI are transforming roles, requiring retraining and repurposing of existing staff.
• Flexible Workforce: The open talent economy, including freelancers, contractors, and part-timers, is reshaping the industry.
• Strategic Focus: Insurers should develop leaders who can guide a digital workforce and invest in continuous adaptation and upskilling.

Product Development Trends

• Need for Innovation: Insurers must improve agility and time-to-market to stay competitive in a rapidly changing market.
• Consumer Demand: Customers are seeking more personalized and flexible insurance options, such as "pay as you ride" policies.
• InsurTech Integration: InsurTechs are offering real-time, on-demand coverage. Incumbents are advised to back or acquire these innovators.
• IoT Challenges: While IoT can enable more flexible policies, implementation costs, consumer demand, and compliance are major hurdles.

M&A Trends

• Mixed Signals: Despite two large acquisitions in 2018, M&A activity has slowed in 2019.
• Potential Uptick: Improved economic conditions and interest rates may lead to more M&A activity, though rising interest rates could increase borrowing costs.
• Deal Activity: M&A deal counts and values increased in the first half of 2018, but brokers saw a significant drop in both counts and value.

Key Information

• US P&C Industry:
  • Premiums grew 12.7% in the first half of 2018.
  • Net investment income increased by 12.2%.
  • Net income more than doubled to over $34B.
  • Consolidated capital and surplus rose by 6.5% to $772B.
• L&A Sector:
  • Premiums showed virtually no growth in the first half of 2018.
  • Net income declined by 12%.
  • Annuity sales are expected to rise between 5 and 10% in 2018, with further growth in 2019.
• Cloud Migration:
  • 26% of US insurers have fully deployed claims systems in the cloud.
  • Cloud-native solutions and automation are expected to be more common in the coming months.
• Blockchain Applications:
  • Real-world blockchain initiatives are expected to increase in 2019.
  • Examples include AIA Hong Kong's bancassurance platform and AXA's flight-delay insurance.
• Talent Strategy:
  • The insurance industry is facing a tight labor market.
  • Employees are expected to shift toward strategic roles as automation takes over routine tasks.
• Product Innovation:
  • Hybrid coverages and real-time, on-demand insurance are emerging trends.
  • InsurTech partnerships and IoT integration are key to modernizing product development.
• M&A Activity:
  • AIG and AXA made major acquisitions in 2018, but 2019 saw a slowdown in deal activity.
  • Insurers should remain prepared for potential M&A activity, especially in the P&C sector.

Conclusion

The insurance industry is at a pivotal moment, with strong short-term performance but long-term challenges such as economic uncertainty, talent shortages, and the need for digital transformation. Insurers must adapt to these changes by investing in technology, rethinking product development, and preparing for M&A opportunities. The report underscores that while external factors play a role, the industry's ability to adapt and innovate will ultimately determine its success in the coming years.