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APAC insurers cite talent shortage as key challenge amid regulatory changes
Insurers in Asia-Pacific say regulatory changes and sustained low interest rates will continue to be their primary external environmental challenges over the next one to three years, according to a new insurer outlook survey conducted by Towers Watson
The Asset 24 Feb 2015

Insurers in Asia-Pacific say regulatory changes and sustained low interest rates will continue to be their primary external environmental challenges over the next one to three years, according to a new insurer outlook survey conducted by Towers Watson. Alongside these challenges, talent-related shortages and ageing systems technology are cited as the most pressing resource challenges faced by insurers in the region.

 

Anxieties over talent-related shortages resonated higher with insurers in Asia-Pacific (87%) than with their global counterparts (78%), while concerns over regulatory changes were felt more by Asia-Pacific (80%) and European (82%) insurers than by their North American (65%) peers. Challenges expressed by Asia-Pacific insurers over ageing technology were shared equally by insurers globally.

 

"With low interest rates in a number of markets in Asia, it's not surprising the interest rate environment ranks high as a key concern," said Michael Freeman, Towers Watson's risk consulting and software leader for Asia-Pacific. "Insurers in varying markets in Asia-Pacific also face challenges in addressing changing regulations impacting core aspects of their business. It is also not surprising the most cited resource concerns are the need for talent and the need for improved systems and technology."

 

Asia-Pacific insurers are the most bullish among their global peers on growth prospects (52%), significantly more so than North American (20%) and European (18%) insurers, with a majority (76%) of Asia Pacific insurers anticipating that growth will be driven organically rather than through acquisitions.

 

"Developing markets offer attractive growth potential. But it's not growth that will come easily. European and North American companies operating in these markets must contend with significant differences in business practices, language and culture," continued Freeman. "Talent-wise, success and failure often depend on an organization's workforce. Insurers that have the right mix of people and skills are more likely to succeed. This in turn makes hiring and retaining the right mix of people the key to insurers' success."

 

Insurers also reflected on the primary opportunities and threats to their business. Aside from the swift pace of regulatory change, other emerging opportunities or threats cited by insurers in Asia-Pacific included changing distribution channels (53%), and changing consumer demographics and attitudes (50%).

 

Steve Kean, Towers Watson's director of insurance and wealth management consultancy for Asia-Pacific said, "Following these global findings, we reached out to local CEOs in Asian markets to further explore some of the issues. What was surprising was that the changing face and behaviors of the consumer were not higher ranked by CEOs as topics they are contending with."

 

Kean added, "This reiterates Towers Watson's views about insurers needing to be totally focused and to avoid being distracted by environmental changes. All around the insurance industry, other sectors are, or have already, geared up to get closer to their customer, understand and engage with them. These consumers are making increasingly informed and sophisticated decisions and choices. They have much different expectations around product, price, value and service than ever before." Freeman added, "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."

 

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