Insurers need to be proactive in fulfilling distributor and policyholder expectations as the global insurance industry stands at a crossroads to shaping long-term success, Deloitte says.

After navigating the pandemic, the looming threat of global recession, fallout from Russia’s invasion of Ukraine and lingering covid concerns are presenting challenges for the industry.

Insurers must pursue innovation and make customer-centricity a focus of the industry standard operating model, while realising the value and benefits of infrastructure and technological upgrades, the Deloitte 2023 insurance outlook says.

The report says insurers must also “move from responding to requirements of regulators and other industry overseers to more proactively fulfilling distributor and policyholder expectations”, setting themselves apart in a competitive market.

“This is like a post-pandemic inflection point to really reset the narrative of what this business called insurance does for every other business out there,” US Insurance Leader Karl Hersch says in a video on the findings.

The report says the small business insurance market appears primed for reinvention with many buyers surveyed by Deloitte Global seeking new types of policies, greater flexibility in terms, pricing and payment options as well as more holistic loss control services.

Cyber insurance is in greater demand, while the London and International Insurance Brokers’ Association has said the London market could double in size just be covering the global transition to green energy for policyholders looking to achieve net zero on carbon emissions.

The world of intangible assets is expanding and creating new exposures to cover, including around cryptocurrency, non-fungible tokens (NFTs) and virtual activities on the metaverse.

The report says in the group insurance market in the US, brokers increasingly expect carriers to help their productivity by providing technology capabilities for digitisation and virtualisation across activities.

Mergers and acquisition activity in the insurance sector has been driven this year by deal volume involving insurance agents and brokers.

“Consolidation was highest among small-and-middle-market players in the highly competitive market, commonly with low bargaining power when dealing with insurers and less talent to support diverse market needs,” the report says.

Click here to read the report.