Talent emerges as a new force insurers need to tackle head-on
TORONTO, Feb. 28, 2017 /CNW/ - Quickly-evolving technology has emerged as a dominant force shaping the year ahead in Canada's life insurance sector, according to EY's 2017 Life Insurance Outlook. This is just one of the 5 forces for life insurers to rein in this year, along with increasingly complex regulations, a growing talent crunch and customer-driven innovation.
"Life insurers face difficult challenges this year that will add pressure to an industry already in a period of sustained transformation," says Janice Deganis, EY's Insurance Leader. "Insurance leaders should be finding ways to unlock value from tough new regulations, remain laser-focused new technologies, like robotics, and at the same time, attract new talent."
Talent has emerged as a new force in EY's ranking, compared to last year's outlook.
EY has identified five external forces shaping Canada's life insurance sector in 2017, and a roadmap to help guide insurers through the shifting landscape ahead.
Impact of external forces on the Canadian life market in 2017:
(0 = Very low impact, 10 = Very high impact)
Regulations (9) – Ever-increasing regulations and new accounting standards will challenge insurers to find ways to unfold value and get out ahead of the potential opportunities these changes represent.
Technology (9) - Digital technologies continue to redefine life insurance, from the potential for cost savings through robotics and analytics, to the growing influence of InsurTechs, to the opportunities artificial intelligence and block chain may offer.
Economic environment (8) – Continued global economic weakness, combined with stubbornly low interest rates, mediocre growth in Canada and political changes in the US and EU ratchet up the pressure on insurers' margins.
Customer expectations (7) – Customer expectations continue to shift towards a more digital, personalized and seamless experience. Simpler products and a holistic approach will become prerequisites of true customer centricity.
Talent (7) –Canadian insurers face a mounting talent shortfall in 2017, fueled by growing retirements among insurance professionals and the impact of digital transformation, which requires new skills in data science, cyber-risk management and blockchain innovation.
Roadmap for transformation: priorities for 2017
Leading life insurers will focus on the following path to change:
1. Focus on unlocking value from a complex regulatory environment.
2. Prepare for more economic uncertainty ahead.
3. Remain laser-focused on customer-driven innovation
4. Embrace the technologies that can improve top- and bottom-line performance
5. Rethink strategies to attract, develop and retain talent.
"Vigilance in both understanding and adapting to these emerging forces will be the key for positive transformation of Canada's insurers," explains Deganis. "Those who prepare for the economic uncertainty ahead and push ahead with thoughtful innovation will be better positioned to get ahead."
Read the full 2017 EY Life Insurance Outlook and the 2017 EY P&C Insurance Outlook.
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SOURCE EY (Ernst & Young)
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