How much has the world been turned upside-down in the past year?
Well, a year ago, the major annual survey of insurance executives by the International Insurance Society found that a third were focused on dealing with problems caused by low interest rates. This year? A third say they're focused on dealing with problems created by high interest rates.
Concern about the pandemic receded in the past year -- but plenty of other worries replaced it. In particular, the IIS's 2022 Global Priorities Survey found that the percentage of executives saying that addressing geopolitical conflicts was a top political and legal priority soared from 5% in 2021 to 42% in 2022.
"With war raging in Ukraine and tensions rising on both sides of the Pacific," the IIS reports, "one executive described the situation as a 'breakdown of the post-WW2 global political order' while another worried that 'the world is becoming increasingly volatile and thus risky.'”
Ominously, of those who listed geopolitical uncertainty as a top-three priority, 48% said they weren't prepared to deal with the problem. Among all respondents, only about 8% said they were very prepared to do so.
Similarly, a quarter of respondents said they were unprepared to deal with social/political instability -- which also appears to be increasing and could flare up following the mid-term elections in the United States in less than a month.
Not surprisingly, long-term inflation ticked way up as a concern. It was already a major worry a year ago, with 49% listing it as a top-three economic priority, but that figure soared to 72% this year. Likewise, concern about long-term growth shot up -- a bit more than a quarter listed it as a top-three issue last year, while some 45% did so this year.
Amid the worries about inflation and growth:
- 52% listed expense management as a top-three business and financial priority, nearly double the 27% who did so in 2021;
- 54% said competition for talent was a top priority, up from 46% a year ago;
- And 28% said a hybrid workforce was a top concern, up from 21% last year.
The good news is that a third said they were very prepared to handle the issue of long-term growth, and almost half said they were somewhat prepared. But a fifth said they were unprepared for the competition for talent, and only about half that many said they were very prepared. (The worry about talent certainly rings true for me: Easily the most read piece I've written in recent months was on "The Staffing Crisis in Insurance.")
Cybersecurity remains the top political and legal concern, with some 70% putting it in their top three, but there are signs that executives feel more like they have their arms around the issue. Half of respondents listed security of data as a top-three priority, but that was down from 62% in 2021. Only a quarter of executives in 2021 felt prepared to address data security, but that figure rose to 35% this year, and the rate of executives who felt unprepared fell from 14% in 2021 to 5% in 2022.
Climate climate change remained the biggest social and environmental priority -- and only about 15% said they were very prepared, while a quarter said they were unprepared. The IIS report said, "Most climate-focused responses pointed to the high cost of natural disasters and the urgent need for the industry to respond. As one executive wrote: 'It is time to take ownership and responsibility to adapt and mitigate climate change. The insurance industry… has to be an advocate for a sensible and effective reaction to the threats… created/increased by climate change.'”
Healthcare moved way up, from seventh place to second, among social and environmental concerns. 31% of respondents listed it as a top-three priority, nearly double the 16% in 2021. The shift reflects lingering concerns about the deficiencies in our healthcare systems that the pandemic exposed, as well as the growing impact of an aging population.
I was happy to see that a third of executives said that the shift to a consumer-driven customer experience is a top-three priority in innovation and technology for 36% of executives in 2022, up from 20% in 2021 -- though I'll always be baffled that the figure isn't 100%.
There's a lot more, too, so I encourage you to go to the International Insurance Society site and learn more. (The report is being formally released today, and I don't have a direct link to it yet.)
While I'm at it, I also strongly recommend checking out the IIS's Global Insurance Forum, a free, three-day, virtual event that begins this morning. The theme is the Great Reset, and the conference has an impressive set of speakers covering a broad range of issues that relate to how the industry can best position itself as we come out of the pandemic -- and confront all the other geopolitical, economic and social issues that the world keeps throwing at us.
You can check out the full agenda here and register here. Did I mention that the conference is free?
One last teaser: Stay tuned for a series of interviews that I'm recording with many of the biggest names from the forum. I've already started -- and we're all in for a treat if the rest are anything like the first ones we've done. I'll provide details when we're ready to release them.
Cheers,
Paul