New YorkAnd November 9, 2021 /PRNewswire/ — Insurers will need to accelerate the pace of evolution of everything from distribution and pricing to customer and investor relations, according to a newly released 2022 Insurance Industry Outlook report from S&P Global Market Intelligence.
The report, published by the financial institutions research team at S&P Global Market Intelligence, highlights several key themes of the insurance industry that include emerging risks, the evolving nature of globalization, balance sheet rationalization and the penetration of technology into all aspects of the insurance value chain. She argues that an increasing number of insurers will need to rethink their operating models to address significant structural changes in the competitive environment and the rapidly evolving macroeconomic landscape.
“The essence of what it means to be an insurance company is changing before our eyes,” he said. Tim Zwaki, Principal Research Analyst at S&P Global Market Intelligence. “Reliance on data and analytics in underwriting, pricing and risk modeling has gained increasing importance since the onset of COVID-19. It will only grow as the industry takes a leading role in the global response to climate change, prepares for future pandemics and provides protection against the financial fallout from cyberattacks.”
Expectations contained in the report include:
A proactive response to the threats posed by economic inflation in the form of rising prices for goods and services as well as social inflation, and a trend toward grand jury rulings and legal settlements, in both pricing and underwriting. Historically favorable outcomes in the personal auto industry during the depths of the pandemic in 2020 may become a distant memory by 2022 as vehicle repair and replacement costs rise.
An increasing role for reinsurance in the life and annuity markets as established carriers explore ways to reduce volatility and increase profitability for both new and existing businesses. The confluence of the increasing supply of solution providers and the growing demand for new approaches to balance sheet management favor the acceleration of this transformation.
The ongoing digitization of underwriting and distribution functions particularly in commodity product lines, backed by greater access to data and analytics, the success of technology disruptions and strategic shifts by carriers to more non-channel approaches to insurance sales.
Continued active investment by established carriers and venture capital providers alike in emerging insurance markets in Southeast Asia, with a special focus on insurance companies. China And India, which is collectively home to nearly half of all private insurance technology companies in Asia Pacific The region, will continue to attract the lion’s share of investor interest.
More mergers and acquisitions across international borders. Some sellers may continue to trade outside of nonessential geographies while buyers seek opportunities in lines of business and geographies characterized by favorable economy and demographics.
The S&P Global Market Intelligence 2022 Insurance Industry Outlook is part of the “Big Picture Outlook” series published by the division’s research group that provides a forward-looking view of key strategic trends and opportunities. To learn more about the “Big Picture Outlook” research series, please visit here.
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S&P Global Market Intelligence’s FIG Research team provides independent forecasting and real-time analysis of the banking, insurance and financial technology sectors, across multiple geographies, leveraging deep industry knowledge of its analysts. FIG’s offering complements the world of S&P Global Market Intelligence to cover the research sector including Energy, Enterprise Technology, Metals and Mining, and TMT (Technology, Media and Communications).
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