The insurance industry has had significant involvement in responding to the impacts of the pandemic with business interruption and contingency policies paying out huge volumes of claims. There has been criticism at times over coverage issues and resultant legal cases around the world. In addition to this, insurers point to the disruptive impact of changes in regulation - pressing developments range from pricing reviews to IFRS 17. Many also highlight the difficulties they face in keeping pace with stakeholder expectations on ESG. As both ESG and the balance sheet impact of IFRS 17 come under increasing stakeholder scrutiny, pressure on both talent and technology is intensifying. Hence, significant investment by those insurers who invested in new technology is now paying off in terms of improved agility and cost-efficiency. Insurers recognise the challenges ahead in sustaining this standout performance. These matters are all commented on by the respondents in the UK CBI/PwC Financial Services Survey.
Technology and Climate (E in ESG) both feature in the Top 5 'banana skins’. PwC has once again sponsored the Insurance Banana Skins 2021 survey in conjunction with the Centre for the Study of Financial Innovation (CSFI). The report details the risks facing the insurance sector across the globe in the next 2-3 years. Its eighth edition describes the most urgent risks, or "Banana Skins", facing the global insurance industry in the latter half of 2021 as seen by a sample of over 600 practitioners and close observers, in 47 territories. It focuses on the key risks such as the threat of technology-driven criminal activity, the challenge of managing the impact of climate change and the continued pressure of low interest rates on profitability and the business model itself.
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