2020 IIS global concerns report
- 1. 2020 Global Concerns Survey February 2021 The Institutes Enterprise Research ITL .com An affiliate of The Institutes | Risk and Insurance Knowledge Group
- 2. An affiliate of The Institutes | Risk and Insurance Knowledge Group 2 Overview Objective Identify which issues are most important to executives and why Results • Respondents were asked follow up question on their top four issues • Margin of error is +/- 7% Methodology Online survey to 10,002 executives associated with: • IIS • PIC • TI • ITL Outcome Responses on • Innovation • Implications of Covid-19 • Emerging threats • Resiliency & Sustainability • Cyber security • Regulation • Closing the protection gap Respondent Profiles What Region of the world are you located in? % of Total North America (NA) 57% Asia Pacific (APAC) 25% Europe, Middle East, and Africa (EMEA) 15% South America (SA) 3% What is the scope of your organization’s business % of Total Single Country 44% Global 38% Regional 19% What is your current title or role % of Total Senior Executive 33% C-Suite 32% Board of Directors 9% Other 26% What is your functional % of Total Executive Management 33% Risk Management 16% Operations 13% Marketing/Sales 12% Strategy 10% Claims 7% Actuarial 4% Finance 3% General Counsel 2%
- 3. An affiliate of The Institutes | Risk and Insurance Knowledge Group Key Findings Insights and Recommendations 3 Key Findings, Insights, and Recommendations • On average, concerns over Innovation was ranked highest, followed by Implications of Covid-19 • Respondents indicated innovation is important, but are mostly in process • Respondents were mostly confident in implementing their innovation plans. • Nearly half of respondents indicated their focus was on the customer experience • Most respondents expect some negative impact from Covid-19, with decreased profit indicated most, followed by decreased sales effectiveness, which are likely related • The most common change in response to the Covid-19 impact were workplace and staffing changes, followed by technology investments • Of the respondents, 92% indicated cyber security was important or very important. • Continuous effort was ranked highest, and Mitigating internal threats, Identifying external threats, and Prioritizing identifying cyber risks were ranked next. • While 95% of respondents indicated emerging threats were important or very important, 28% Indicated they were very good at responding to them • For resiliency and sustainability, corporate ESG and R&S for internal operations were ranked as the highest priorities Innovation was a very high priority in 2019 and continues to be a high priority this year, but less than half of respondents have a plan in place • While firms are dealing with the immediacy of Covid-19, there is demand for innovation topics and help with innovation planning • Predictably, Covid-19 has taken priority over other issues • While Innovation remains a high priority, Cyber security issues are a lower priority • At the same time, firms are predicting lower revenue and sales difficulties • It appears Innovation and Cyber security may not have the resources they need due to the current urgency and impacts of Covid-19 response Cyber security was the greatest concern in 2019 and remains very important in 2020 • However firms are emphasizing proactive security measures: • Continuous effort was ranked highest, particularly in North America • Mitigating internal threats, Identifying external threats, and Prioritizing identifying cyber risks were ranked next highest • There is a need to help firms prioritize cyber security and continue proactive efforts • Firms’ emphasis is on the customer experience, which requires securing customer
- 4. An affiliate of The Institutes | Risk and Insurance Knowledge Group Respondents were asked to rank these 7 topics, each receiving a rank of 1 through 7, with 1 being the highest priority • The average ranks ranged from 3.2 out of 7 for Innovation, to 4.8 out of 7 for Closing the Protection Gap Innovation Average Rank For the following issues, please rank them from highest priority to lowest, where 1 is the highest and 7 is the lowest Implications of COVID-19 Emerging Threats Cyber Security Regulation Resiliency and Sustainability Closing the Protection Gap 3.2 3.5 3.9 3.9 3.9 4.8 4.8 4 On average, Innovation was ranked highest, followed by Implications of Covid-19
- 5. An affiliate of The Institutes | Risk and Insurance Knowledge Group 5 Innovation For the following issues, please rank them from highest priority to lowest, where 1 is the highest and 7 is the lowest Implications of COVID-19 Emerging Threats Cyber Security Regulation Resiliency and Sustainability Closing the Protection Gap Asia Pacific (APAC) Europe, Middle East, and Africa (EMEA) North America (NA) 2.9 2.6 4.3 4.6 4.2 4.6 4.8 3.6 3.6 4.1 4.1 3.7 4.2 4.6 3.4 3.7 3.6 3.6 4.1 4.8 4.9 • Innovation and Implications of Covid-19 were ranked significantly higher for APAC than for other regions. • For NA, Emerging Threats and Cyber Security were ranked significantly higher than other regions. Issues by Region
- 6. An affiliate of The Institutes | Risk and Insurance Knowledge Group Innovation Implications of COVID-19 Emerging Threats Cyber Security Resiliency and Sustainability Higher Priority More Important • Comparing priority and importance, Innovation is both more important and a higher priority than other topics • Implications of Covid-19 is of higher priority, but not necessarily of higher importance • Cyber Security is the second most important, but a low priority • This suggests that Covid-19 has taken resources from other important initiatives due to its urgency 6 Of the top five issues, Innovation is the highest priority and most important. Covid-19 is also a higher priority and Cyber security is also important
- 7. An affiliate of The Institutes | Risk and Insurance Knowledge Group • In the 2019 survey, Cyber Security was the greatest concern, followed by Health care and Innovation • In 2020, Covid-19 was ranked second after Innovation, with Cyber Security tied for third rank • Health care was selected most frequently as an emphasis relative to the protection gap 7 Comparison to 2019 Results Percentage of respondents indicating that the issue is of “greatest concern” Cyber security 72% Health care 65% Innovation 65% Low investment yields 41% Political instability 45% Updating legacy systems 52% Economic development 52% Aging / changing demographics 52% Regulation 53% Digitalization of the customer relationship 57%
- 8. An affiliate of The Institutes | Risk and Insurance Knowledge Group Innovation is important, but respondents are mostly in process: • Of the respondents, 95% indicated innovation was important or very important to success • However, 35% indicated they had an active, comprehensive plan • Another 12% had a plan, leaving nearly 2/3 at a competitive disadvantage, without an Innovation plan, and more than half with little activity on innovating. We are innovating as we can, depending on resources and circumstances How important do you think innovation is to the success of your business? Please note: Response options include: Very important, Important, Somewhat important, Not important at all. No respondents indicated not important options. We are not focused on innovation at this time We are trying to innovate but aren’t actively planning for it We have a comprehensive plan in place and are actively implementing it We are developing an innovative plan We have a comprehensive plan in place and are preparing to implement it 35% 33% 3% 1% 16% 12% Innovation Very important 79% Important 16% Somewhat important 4% 8 Which statement best describes your company’s plan for innovation?
- 9. An affiliate of The Institutes | Risk and Insurance Knowledge Group • Respondents with plans were confident in their success in implementing their innovation plans. • Nearly half of respondents with plans indicated their focus was on the customer experience Improving operational efficiency Improve customer experience Other- Please describe Keeping pace with competitors 49% 33% 8% 10% Innovation 9 How confident do you feel that your company will successfully implement your innovation plan? Please note: Response options include: Very important, Important, Somewhat important, Not important at all. No respondents indicated not important options. Very Confident 30% Confident 52% Somewhat Confident 18% Other All of the above Be relevant to customers needs Changing our culture Creating competitive advantage Creating new technology Generating more income Innovation leader Innovation through collaboration New products to answer gaps None that i am aware of What is the primary objective of your firm’s innovation strategy?
- 10. • Most respondents expect some negative impact, with decreased profit indicated most, followed by decreased sales effectiveness, which are likely related • About a quarter of respondents anticipated positive workplace impacts or increased sales opportunities Covid-19 Impact 10 How do you think the current Covid-19 situation will impact your business? Very much decreased Sales effectiveness Very much decreased sales opportunities Very much negative regulatory impact Very much Negative workplace impacts Very much decreased profit Some decreased sales effectiveness Some decreased sales opportunities Some negative regulatory impact Some Negative workplace impacts Some decreased profit Little change Little change Little change Little change Little change Sales effectiveness Some increased sales effectiveness Some increased sales opportunities Some positive regulatory impact Some positive workplace impacts Some increased profit Very much increased sales effectiveness Some increased sales opportunities Very much positive regulatory impact Very much positive workplace impacts 19% 19% 13% 7% 21% 43% 38% 42% 41% 50% 25% 16% 25% 23% 20% 11% 24% 19% 27% 9% 2% 3% 1% 2% Sales effectiveness Sales opportunities Regulatory impact Workplace impacts Profit
- 11. An affiliate of The Institutes | Risk and Insurance Knowledge Group • The most common change in response to the Covid-19 impact were workplace and staffing changes, followed by technology investments • The most common change in response to the Covid-19 impact were workplace and staffing changes, followed by technology investments Covid-19 Impact 83% 65% 28% 6% 7% 35% 57% 56% 39% 6% 44% 38% 18% 39% 48% 14% 15% 2% Definitely Definitely not Maybe Changes to office space/ work from home/ staffing options Technology investments Changes to marketing strategies Changes in policy design to account for pandemic type risks Changes to hiring and staffing levels Changes to investment strategies 11 Unpredictable economy Health and Safety of our employees Future Sales Changing work space and work force Volatile investment environment 45% 45% 55% 78% 82% Same Productivity Lower Productivity Higher Productivity In your opinion how has staff productivity been impacted by employees working from home? What are some of your biggest concerns as countries start emerging from the shutdown and quarantine? What types of actions do you plan in response to impacts of the COVID-19 situation?
- 12. An affiliate of The Institutes | Risk and Insurance Knowledge Group In your opinion, how has staff productivity been impacted by employees working from home? What type of company do you work in? • There was some variation by the type of firm. • Those in both Property & Casualty and Life & Health were more likely to see higher productivity • Reinsurers were more likely to see low productivity Covid-19 Impact 42% 42% 17% 28% 39% 33% 23% 23% 21% 24% 54% 55% 56% 44% Both Property and Casualty and Life Health Insurance Insurance Broker Primarily Life and Health Insurance Primarily Property and Casualty Insurance Reinsurer Higher Productivity Same Productivity Lower Productivity 12
- 13. An affiliate of The Institutes | Risk and Insurance Knowledge Group • Unpredictable economy was selected most by EMEA respondents. • For APAC and NA, Health and safety of employees was also selected most Covid-19 Concerns by Region 26% 25% 21% 16% 13% 20% 29% 20% 16% 14% 26% 27% 17% 13% 18% Asia Pacific (APAC) Europe, Middle East, and Africa (EMEA) North America (NA) Health and safety of our employees Health and safety of our employees Health and safety of our employees Unpredictable economy Unpredictable economy Unpredictable economy Future sales Future sales Future sales Volatile investment environment Volatile investment environment Volatile investment environment Changing workspace at work force Changing workspace at work force Changing workspace at work force What are some of your biggest concerns as countries start emerging from the shutdown and quarantine? Please select all that apply 13
- 14. An affiliate of The Institutes | Risk and Insurance Knowledge Group Cyber Security • Of the respondents, 92% indicated cyber security was important or very important. • In ranking the importance of components, continuous effort was ranked highest, and Mitigating internal threats, Identifying external threats, and Prioritizing identifying cyber risks were ranked next highest. Continuous effort, not one-time activity Average Rank For the following issues, please rank them from highest priority to lowest, where 1 is the highest and 7 is the lowest Mitigating internal Threats (phishing,data protection etc) Identifying external threats Creating effective responses to external threats Adaptability and agility Prioritizing identifying cyber risks 3.0 3.2 3.2 3.2 4.0 4.2 How important is cyber security to the success of your business? Very important 75% Important 17% Somewhat important 7% Not very important 2% 14
- 15. An affiliate of The Institutes | Risk and Insurance Knowledge Group Cyber Security • Of the respondents, 16% indicated they were very prepared to respond to cyber security threats • The biggest impacts were in • Increased employee awareness • Increased IT awareness How prepared do you think your firm is to deal with cyber security threats For your firm, how much has the COVID-19 situation impacted your cyber security efforts? please select all that apply Very prepared 16% Prepared 53% Somewhat prepared 28% Not prepared 2% Not prepared at all 1% Increased awareness for employees Increased focus for IT and data security Much more focus throughout the firm More of a concern for communication systems No real impact 29% 29% 30% 39% 40% 15
- 16. An affiliate of The Institutes | Risk and Insurance Knowledge Group Continuous effort, not one-time activity What do you think are the most important components of success in maintaining cyber security? Please rank the items below by dragging them to the right in order. Mitigating internal threats (phishing, data protection etc) Prioritizing identifying cyber risks Identifying external threats Creating effective responses to external threats Adaptability and agility Asia Pacific (APAC) Europe, Middle East, and Africa (EMEA) North America (NA) 3.4 3.4 4.0 2.6 3.0 3.4 3.7 2.9 3.0 3.2 3.2 3.4 2.9 3.8 3.8 4.1 4.1 4.3 • By region, NA ranked Continuous effort significantly higher than other regions. • EMEA ranked prioritizing identifying cyber risks significantly lower than other regions. • Other rankings were similar by region Cyber security by Region 16
- 17. An affiliate of The Institutes | Risk and Insurance Knowledge Group Emerging Threats • While 95% of respondents indicated emerging threats were important or very important, 28% indicated they were very good at responding to them Very good Good Fair Poor Very poor 1% 3% 25% 43% 28% How important is cyber security to the success of your business? How would you rate your firm on being able to adapt to emerging threats? Very important 66% Important 29% Somewhat important 3% Not very important 2% 17
- 18. An affiliate of The Institutes | Risk and Insurance Knowledge Group How prepared do you think your firm is to deal with cyber security threats Very prepared 16% Prepared 53% Somewhat prepared 28% Not prepared 2% Not prepared at all 1% Corporate ESG (environmental, Social, Gover- nance) policy Average Rank What are your organizations priorities relative to resilience & sustainability (R&S)? Please prioritize each of these on a scale of 1-5, with 1 being the highest and 5 being the lowest priority R&S framework for internal operations R&S Criteria in your investment policy guidelines R&S criteria in your underwriting guidelines Promoting R&S issues 2.7 2.7 3.0 3.2 3.2 Emerging Threats • Of the respondents, 52% indicated R&S was very important • Corporate ESG and R&S for internal operations were ranked as the highest priorities • R&S criteria for underwriting guidelines was ranked the lowest priority 18
- 19. An affiliate of The Institutes | Risk and Insurance Knowledge Group Resiliency and Sustainability • While Corporate ESG and R&S for internal operations were ranked as the highest priorities • 62% indicated they had a plan for Corporate ESG • 69% indicated they had a plan for R&S for internal operations Do you have R&S criteria in your investment policy guidelines? 69% Does your firm have an R&S framework for its own operations? 69% Do you have corporate ESG (Environmental, Social & Governance) Policy? 62% Do you have R&S criteria in your underwriting guidelines? 50% 19
- 20. An affiliate of The Institutes | Risk and Insurance Knowledge Group Uncertainty of future regulations Clarity of regulation Increased cost Time to market Regional Differences Effect on competitiveness 1.9 2.0 2.1 2.4 2.8 3.1 Regulation • Respondents ranked the uncertainty of future regulation and the clarity of regulations highest • In the trade-off between decreased cost or increased innovation from reduced regulation, 62% indicated they would do some of both What are your main concerns about dealing with regulations? Please indicate the priority of these issues, with 1 being the highest and 7 being the lowest If regulations you are most concerned about were eliminated, how would that impact your ability to reduce cost and increase innovation? Would you only reduce cost or would you only increase innovation, or some of both? 65% 60% 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Decrease cost more 16% Increase innovation more 23% Both equally 60% 20
- 21. An affiliate of The Institutes | Risk and Insurance Knowledge Group Developed market issues i.e. healthcare, retirement savings Both Other- Please de- scribe Developing marketing issues, i.e. microinsurance 44% 26% 12% 22% Protection Gap Other Coverage consulting Emerging employer liability risks Emerging risks (Pandemics/Cyber) Health, Motor, & Property insurances More protection less exclusions P&C Insurance Risk, Retirement, Health, Talent, Data and Analytics Underserved communities We are helping brokers become more efficient Workers Comp Relative to the protection gap, which areas does your firm operate? Where is your firm’s emphasis relative to the protection gap? Please select all that apply Access to healthcare 40% Morality protection 37% Retirement savings protection gap 37% Retirement 27% 21
- 22. An affiliate of The Institutes | Risk and Insurance Knowledge Group • Access to healthcare was selected most in APAC and EMEA • Retirement savings protection was also selected most in EMEA • For NA, Retirement savings protection was selected most Protection Gap by Region 32% 32% 32% 30% 23% 14% 24% 26% 20% 27% 22% 19% Asia Pacific (APAC) Europe, Middle East, and Africa (EMEA) North America (NA) Access to healthcare Access to healthcare Access to healthcare Morality protection Morality protection Morality protection Retirement Retirement Retirement Retirement savings protection gap Retirement savings protection gap Retirement savings protection gap Where is your firm’s emphasis relative to the protection gap? Please select all that apply 22