Our first publication for the European general insurance industry explores the issues affecting insurers in 2015 and examines the routes towards profitability.
Towards profitability—European general insurance
2015 global insurance outlook
Navigating market volatility
The path to 2020 for global insurers
Eurozone Forecast: Outlook for Financial Services – Winter 2014
2014 Global Consumer Insurance Survey
Future directions for foreign insurance companies in China
Banking in emerging markets: Twitter chat
Insurance: Insights into cyber security and risk
Navigating change to seize new global opportunities
Major regulatory change. The rise of emerging markets. Ongoing economic uncertainty. Technology-driven turbulence. Increasing consumer expectations.
These are the primary challenges and issues faced by insurance executives. These challenges also offer the key to future profitability for insurers who make the right strategic, investment, organizational and operational changes.
Our insurance practice helps insurers around the world successfully meet these challenges. We can help you ask the right questions, set priorities and define the action plans needed to succeed in the fast-shifting insurance landscape.
Our network of insurance professionals provides guidance and insight on pivotal areas in the insurance industry today, including:
- Customers and growth
Your customers, your growth
In today’s competitive and capital-constrained market, growing, deepening and retaining customer relationships is vital to achieving sustained and profitable growth.
Economic drivers, combined with changing demographics and buying patterns, are forcing insurers to re-evaluate their business models, the markets in which they operate and the propositions they offer.
Other dynamics include:
- The emergence of disruptive technologies
- Customers’ unprecedented access to information
- The growing recognition of the importance of existing customers
- Evolving consumer protection regulation
We can assist your organization in addressing these issues to grow, protect and optimize your business. Specifically we can help you with:
- Risk transformation
In many insurance companies, risk management and actuarial capabilities have grown organically over time -- with new organizational units, processes and technology gradually added to meet evolving requirements for risk control and regulatory compliance. Too often though, these structures are not agile, efficient or aligned to the rest of the business (especially finance and treasury functions).
Insurance companies need risk and actuarial processes that link effectively with the rest of the organization. The processes must be effective at protecting the balance sheet from unexpected risks, while adding value to business decision-making within tight cost constraints.
We have the experience and tools to support your design and implementation of the following:
- Optimal vision and Target Operating Model for risk management
- More agile and simplified systems and data landscape to support risk-management analytics and reporting
- Cost-effective risk and actuarial oversight processes, including alternative sourcing options (offshoring and near-shoring)
- Rationalized approach controlling operational, reporting and compliance risks
- Underwriting and pricing effectiveness
Given unrelenting economic uncertainty and prolonged low interest rates, insurers face significant profit- and growth-related pressures and thus must improve the efficiency and effectiveness of their underwriting capabilities.
One way to improve risk selection and pricing is leveraging data to embrace more sophisticated segmentation. However, success will ultimately depend on adopting enhanced analytical and modeling techniques.
We can help you optimize the following:
Underwriting and pricing operations: We review your organization’s current underwriting and pricing performance, measure it against industry standards to determine where to make investments and provide technology solutions to fill operational gaps.
Solution architecture: We offer program management, functional and technical design, integration, configuration and testing and deployment. We also assist in the technology selection process, helping you narrow the wide spectrum of underwriting automation components and applications.
- Policy administration and billing transformation
Insurers are under constant pressure to reduce underwriting operations costs, while continuing to grow their customer base without increasing headcount. They also face tougher demands from producers and customers who want faster quoting, more accurate policy issuance, diversified billing and payment options and real-time self-service capabilities.
We can help you optimize the following:
- Product development and delivery
Incompatible systems, organizational silos and disjointed processes perpetuate costly and low- quality product development approaches. As a result, many insurers have redundant product portfolios that complicate underwriting, operations and claims processes.
As insurers look to refresh and expand their products, these issues restrict their ability to react to market changes and satisfy their customers.
Product design and delivery architecture are central to innovation and fulfilment across the insurance enterprise, and they must be integrated into both business processes and technology solutions.
We can help your organization take the following steps to develop a robust suite of products designed for specific customer needs:
Assessment: We review your current product development, processes, systems data, interfaces and delivery capabilities to increase speed to market. We offer tools to evaluate your products, learn if there are ways to simplify them and help reduce costs.
Business and solution architecture development: We help you properly align organizational needs and technical priorities for product development. We ensure assessment and future state definition can be delivered using best market practices. By applying our proprietary tools, maturity models, product design know-how and business case frameworks, we assist with architecture assessment and help insurers deliver future solutions that are in line with best market practices.
Product development workstation: We align and integrate product development workstation capabilities with other underwriting and policy administration systems. This includes developing a target solution architecture, as well as selection, design, configuration, integration and deployment of an effective workstation.
- Claims offerings
Our offerings enable transformational or step changes in claims capabilities. Our expertise and analytical insight can help you achieve better claims outcomes and expense management.
Our team can help insurers in the following ways:
- Are you ready for Solvency II?
Although political agreement on the date for full implementation of Solvency II remains elusive, EIOPA is currently consulting on guidelines which will encourage preparation activities by both (re)insurers and national regulators.
Are you ready?
- Actuarial and risk management strategies
As the insurance market undergoes radical change, insurance companies face a difficult balancing act. They must identify and assess new options for value creation while continuing to manage risks and meet emerging regulatory requirements such as Solvency II and IFRS.
The combination of our dedicated actuarial and risk professionals and close partnerships with related practices across EY provides truly integrated services across all disciplines in the insurance industry. See where our more than 1000 actuarial and insurance risk professionals serve clients around the world.
Our deep global knowledge comes from our work with insurance companies, banks, pension funds, private equity firms, sovereign funds and local regulators and enables us to answer key challenges the industry faces.
Leverage our knowledge by contacting our actuarial insurance team leaders in EMEIA, the Americas, Asia-Pacific or Japan.
Our areas of focus include the following services:
- Actuarial transformation
- Actuarial review
- Actuarial operations
- Changes to financial reporting methods
- Performance improvement
- Be prepared for IFRS/accounting changes
We are increasingly living in a global economy — with trade and inbound and outbound investment a fact of life. It's no wonder capital markets have long advocated for globally recognized accounting standards.
Until recently, that common accounting language has been a missing link. Now, policymakers, lawmakers and regulators are working alongside standard-setters to provide a single set of high-quality, global accounting principles.
Benefit from our timely insights as your prepare for this transition.
- Governance facing the industry today
We, along with Tapestry Network, established the Insurance Governance Leadership Network (IGLN), a global network centered around non-executive directors from a select group of the largest insurers from Europe, North America and Asia. The IGLN provides a peer-to-peer platform for participants to discuss critical issues facing the industry globally. Its primary focus is the non-executive director, but it also engages senior management (notably chief risk officers) and regulators, all of whom are committed to outstanding governance and supervision in support of the mission to build strong, enduring, and trustworthy insurance institutions.
Tapestry Briefings – A View from the Boardroom:
- Insurance industry facing real challenges: a view from the boardroom
- Global insurance leaders find common ground amid economic and regulatory uncertainty
- The challenge of aligning risk-based regulations
- Insurers face challenges implementing Solvency II
- The emergence of emerging markets
The global economy is at a turning point. Fast-growth economies in Asia, the Middle East, Africa, Latin America and Eastern Europe now form almost half of global GDP and, in 2010, they contributed 70% to overall global growth.
These trends are accelerating. By 2050, fast-growth economies are projected to account for 65% of the global economy. In contrast, most developed markets are still struggling to recover after the global recession.
For many businesses, their very survival depends on pursuing a growth agenda. This might include expanding into new markets and sectors, finding new ways to innovate or taking new approaches to talent.
But there’s one key question that must be answered: how can your insurance business make the most of the many opportunities that exist?
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