Eighty-eight percent of insurers said that addressing aging technology systems is a top-three challenge for 2015, according to Towers Watson’s “Insurance Industry Outlook 2015” survey, InsuranceNetworkingNews.com reports.
The poll of 335 property and casualty, as well as life insurance executives found anxiety over technology eclipsed talent shortages (ranked in the top three by 78 percent of respondents) and inadequate capital (39 percent) as the prime resource-related challenge for the year. Forty-one percent said technology upgrades were their No. 1 concern.
“In Asia, some companies are establishing internal innovation centers to become market disruptors before they get disrupted, and more insurers might want to consider this approach,” said Michael Freeman, Towers Watson’s Risk Consulting and Software lead, Asia Pacific.
The “pace of innovation” was ranked as a top-three opportunity or threat to insurers’ business plans by 39 percent of respondents. Big data came in at 30 percent, with only 7 percent identifying it as the No. 1 opportunity.
But overall, regulation was a top concern of insurance executives polled. It was identified as the top environmental challenge, beating out interest rates, market volatility, and climate change, among others. Regulation was also viewed as a bigger threat than the pace of innovation or big data were viewed as opportunities in that section of the survey.
“Disproportionate, short-term focus on regulation is a long-term cause for concern at a time when insurers have many emerging challenges to think about, such as the opportunities of big data and social media, and the poor underwriting environment,” adds Graham Fulcher, Towers Watson’s EMEA P&C practice lead. “That is part of the danger with an excessive focus on regulation: It distracts insurers from spending adequate time on things that ultimately matter more.”
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