Top issues faced by insurance companies
The regulatory environment has always been one of the most influential force affecting the insurance companies, and with no surprise it still remains one of the important concerns. In the 2012 PwC 15th annual global CEO survey ,the over regulation pushing the insurance companies has been voted as the second largest threat to the growth. Though the regulatory complexity have been prevailing for longtime in the history of insurance companies, the increasing pressures from country level authorities by rolling out requirements specific to the local market poses severe challenges.
Insurance industry is one of its kind where historically, the trust and relationship between the customers and the company representatives (agents or brokers) have played a critical role in doing business. But now the world is changing, information is easily available for the customers through various technology mediums like internet; customers can reach out to their computers, tablets or mobile phones to get information on various products and premiums. Though the significance of these middlemen in making the customers comfortable in buying an insurance policy has not been reduced significantly, the world is changing. Thanks to the recent economic lessons history has taught us, the companies are more proactive towards embracing the social media change. But ‘How’ still remains a big question, at least in the insurance industry.
Increasingly maturing market
Though the recession has not hit insurance industry as badly as it hit the banking industry, the overall growth has slowed down significantly. Mature markets like US and UK have been seeing negative growth, and if they do recover the growth is expected to stay less than 1%. So the CEOs are left with a choice to either take aggressive performance improvements to squeeze out better margins, or to expand into the growing markets. No wonder why data analytic and optimization is seeing enormous growth in recent times!
Costs vs Service
As the revenues decrease, the insurance companies face hard time dealing with increasing costs as well. Just like any other companies, as the margins get reduced the companies’ services decrease, partly due to the limited human resource power. With the average age of employees in insurance industry wavering around 50, the challenge in retaining the talent pool becomes another critical issue for the insurance companies.