Change Management, A Concern For Insurance Cos
The insurance industry in India has undergone massive changes over the past few years. However, with technology and business landscape constantly changing, adapting to further changes can be a matter of concern, according to a survey conducted by the Centre for the Study of Financial Innovation (CSFI), a non-profit firm that focuses on developments in the international financial sector.
The study titled: Insurance Banana Skins 2015, was done with PwC. and its results are based on over 800 responses from insurance practitioners in 54 countries, including India. The purpose was to find where insurers saw the greatest risks over the next two to three years.
The India findings are in contrast to the overall global findings, where regulatory concerns emerged as the overall top risk for participants in the survey for the third successive time, underlining the deep impact of regulatory changes. The economic environment was also a lower order concern, with positivity about India’s growth and inflation under control.
Anuraag Sunder, director, PwC India, said, “Respondents from India perceive regulation as the least important risk and this could only be a reflection of the new reality where post the FDI changes, the sector has accepted the new set of regulations as the ‘new normal’. They are now more focused on ‘change management’, which is ranked as the top business risk.”
He said fast-paced changes on ever-evolving customer side and increasing demand of digital interface is also a reflection of ‘change management’ that insurers would need to adapt to.
For Indian insurers, financial risks including exposure through long term liabilities and investment performance and human capital risks that of quality of management and human talent are key barriers.
As Indian customers continue to adopt technology in a big way, adapting to their ever-evolving demand is often challenging. Though the survey showed technology was widely seen as the driving force behind new markets, changing customer demand, and facilitating competition from non-traditional entrants. Many respondents saw the current challenges demanding special urgency.
The study raised concerns that the traditional insurance sector might be slow to grasp the opportunity and will end up facing a threat. Developments such as digitization, the internet and social media are already influencing price and demand for insurance products, believe PwC analysts. This means insurance providers will have to be more customer-centric in order to constantly adapt to change management.
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