About 10 months into the global COVID-19 pandemic, insurance leaders are less confident about growing their business and are increasingly concerned about the cratering economy.
While 84% of Canadian CEO’s continue to be confident in seeing growth in their companies there has been a huge drop in the confidence of the Canadian economy. Before the pandemic, 77% of insurer CEOs in a 2019 KPMG survey reported feeling optimistic about the economy. Then in March 2020, COVID-19, was declared a global pandemic which significantly modified business confidence. By year end, the 2020 KPMG survey showed that confidence in the Canadian economy has significantly reduced to 48%, which is the largest shift in the history of the surveys.
But while insurers were losing confidence in growth opportunities and the economy, they did see some opportunities as a result of COVID-19. For example, the pandemic has forced them to accelerate the creation and implementation of seamless digital experiences for customers. Also, more than half (60%) of insurance CEOs said they’ll be considering downsizing their office space, based on their positive experience with staff working remotely. Nearly four in five (76%) of them said the ability to have staff work remotely means they can widen their potential talent pool beyond where their offices are located in order to raise the talent bar of their organization.
KPMG also reported that COVID-19 has changed what insurance company CEOs perceive as their greatest threats. Survey ranking showed the following top five concerns. Climate Change (#1), Return to Territorialism (#2), Disruptive Technology (#3), Talent risk (#4) Cyber security (#5). With the increasing trend of WFH (Work from Home) as the result of the pandemic, companies are quickly shifting their resources toward greater digital enablement, improved cyber protection and hybrid workforces.
While there are continued threats to returning to pre-pandemic business levels, this is an opportune time for insurance leaders to review how their companies will operate post-pandemic. Many companies are engaging in operational reviews with the expectation that the pandemic will be brought under control in 2021 and the economy will begin to recover. However, it will likely be a different operating environment with changed risk levels that will impact company policies and procedures.
Canadian Insurance Mutual Professionals have expertise in strategic and operational reviews for Canadian Insurance companies and would be pleased to provide assistance for the Mutual Insurance community.
To review the 2020 KPMG Insurance Survey in full, click on the attached PDF doc.