The global insurance industry faces a truly unique moment in its long history. The fundamental disruption caused by the COVID-19 pandemic is an opportunity for the industry to remake itself in line with new societal realities and market needs.
EY’s 2021 Global Insurance Outlook report, the latest in our annual thought leadership series, focuses on where the industry is today and how to navigate the strategic horizon of the next 18-24 months. While much remains uncertain in this market, more disruption and rapid evolution are inevitable.
To rebuild the positive momentum that COVID-19 interrupted, bolder and more creative thinking is necessary at an organization's highest levels. As insurers look to initiate growth in a new era, they must view their core value propositions, distribution approaches, workforce strategies and data and technology infrastructure as one unified environment. They must continue their pandemic-inspired shift to digital, retain their focus on new and ever-evolving customer needs and become more agile in their thinking and operations.
However, in this complex and dynamic market, the most significant risks and largest growth opportunities are closely intertwined, requiring new strategies and approaches to transformation. The impacts of macroeconomic conditions, geopolitical developments, technology advancements, demographic changes and rising customer expectations must be viewed holistically. The same is true of industry convergence, as the insurance industry is increasingly affected by trends and shifts in other sectors, and vice versa.
Top strategic and tactical imperatives are intrinsically connected. Purpose-driven strategies cannot be separated from enhanced customer experiences and digital transformation initiatives, nor investment plans from cost optimization efforts. Insurers must establish a lean, flexible cost base that boosts margins and ratios in the near term and sets the stage for scalable innovation and sustainable growth. To put this concept into management terms: adjusting one lever may move all the others.