德勤-2018保险业展望（英文）-2017_-_24页-2mb

2018 Insurance Outlook Summary

Core Content

The 2018 Insurance Outlook report outlines the evolving challenges and opportunities facing the insurance industry. It emphasizes the need for insurers to adapt to a rapidly changing environment driven by technological innovation, regulatory shifts, and shifting consumer expectations. The report is structured around key themes: the current state of the insurance industry, growth prospects, and strategic considerations for both Life & Annuity (L&A) and Property & Casualty (P&C) insurers.

Main Viewpoints

1. Current Industry Challenges

• P&C Insurers:

  • US P&C insurers faced significant underwriting losses in 2017, with losses more than doubling to $5.1 billion in the first half of the year.
  • Natural catastrophe losses and rising auto claims have led to higher loss costs, impacting profitability.
  • Overcapitalization has created a soft market, especially outside of auto and property-catastrophe lines.
  • Climate change is expected to increase the frequency and severity of natural disaster claims.

• L&A Insurers:

  • Persistently low interest rates have undermined profitability for L&A products.
  • The US Department of Labor's fiduciary rule has created uncertainty and required significant changes in product offerings and distribution strategies.
  • Outdated underwriting and application processes are a barrier to growth and customer engagement.

2. Growth Prospects

• Emerging Markets: China is highlighted as a potential growth area for P&C insurers due to rapid premium growth.
• Digitalization: L&A insurers can benefit from digital transformation, including streamlined application processes and real-time underwriting.
• Connectivity and IoT: The integration of smart devices and IoT technology presents opportunities for P&C insurers to improve underwriting, pricing, and claims management, particularly in auto and homeowners insurance.
• Product Innovation: L&A insurers should consider simplifying products and leveraging digital platforms to reach younger demographics and expand market share.

3. Strategic Considerations

• Adaptation to Regulations: Insurers must stay ahead of regulatory changes, including the DOL fiduciary rule in the US and GDPR in the EU.
• Collaboration with InsurTech: L&A insurers are advised to partner with or invest in InsurTech startups to enhance digital capabilities and innovate.
• Customer Experience: Enhancing the customer experience through digital tools and transparency is crucial for maintaining and growing market share.

Key Opportunities

• Digital Transformation: Implementing digital technologies can streamline operations, improve customer experience, and reduce costs.
• Telematics and UBI: Usage-based insurance (UBI) is gaining traction, offering insurers a way to better assess risk and tailor pricing.
• Smart Home Devices: IoT-enabled smart home devices can help insurers prevent losses, reduce claims, and engage customers proactively.
• Cyber Insurance: With the rise in cyber threats, cyber insurance is becoming an essential product, especially for financial services companies.

Key Threats

• Regulatory Uncertainty: Ongoing changes in regulatory environments, such as the DOL fiduciary rule and GDPR, pose compliance challenges.
• Market Saturation: In P&C insurance, the market is becoming more competitive and commoditized, requiring differentiation beyond price.
• Low Interest Rates: L&A insurers are struggling with low interest rates, which impact profitability and product design.
• Technological Disruption: InsurTech startups are challenging traditional insurers with innovative business models and digital capabilities.

Recommendations

• Embed Digital Technology: L&A insurers should integrate digital tools across their organizations to improve efficiency and customer engagement.
• Enhance Underwriting Models: Utilize real-time data and advanced analytics to develop more accurate underwriting models.
• Partner with InsurTech: Collaborate with or invest in InsurTech companies to stay competitive and inject innovation.
• Improve Transparency: Clearly communicate data usage and privacy policies to build consumer trust.
• Focus on Cybersecurity: Strengthen cybersecurity measures and consider offering cyber insurance to meet growing demand and regulatory expectations.

Conclusion

The insurance industry is at a crossroads, with the need to balance traditional operations with digital innovation. Insurers that proactively address challenges through strategic adaptation and technological integration are likely to thrive in the evolving market. The report encourages a forward-looking approach to remain competitive and meet the demands of a more informed and tech-savvy consumer base.