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US insurers predict gains through product development

New products, geographic expansion and access to new distribution channels will drive profitable growth next year, according to a survey of US insurance and reinsurance professionals.

The industry considers cyber attacks and terrorism the most significant emerging threats to profitable growth, the Guy Carpenter study shows.

Climate change is also a concern, flagged by almost one-third of respondents.

The third annual survey of industry executives was held at this year’s Property Casualty Insurers Association of America annual meeting in Scottsdale, Arizona.

It shows 40% of executives rank cyber attacks as the most threatening emerging risk, followed by terrorism (31%) and climate change (29%).

Guy Carpenter US CEO Andrew Marcell says cyber attacks are one of the most serious economic and national security challenges facing the insurance industry, governments and businesses worldwide.

“The challenge in facing emerging risks such as cyber attacks or terrorism, where there is less of a historical precedence and data available, rests in modelling and quantifying potential impacts,” he said.

“Assessing and managing current and future risks will continue to be critically important for the industry to realise its growth objectives.”

About 40% of survey respondents believe the biggest opportunity to expand their business next year will be through new products, up from 24% last year.

The next most popular growth drivers are new geographic markets (23%, and down from first place last year), new distribution channels (17%) and mergers and acquisitions (14%).

Technology improvements and identifying and retaining talent continue to be top priorities: 38% of respondents say that if given a blank cheque to invest in their business, they would spend it on talent.