December 12, 2017
Global Trends 1H 2017: Upside Potential
An uptick in global growth and rebound in employment levels, if sustained, will have favorable implications for the insurance sector.
External influencers: mixed macroeconomic signals
- Uptick in global growth and rebound in employment levels, if
sustained, will have favorable implications for the sector.
- As central banks turn cautious, bond yield improvements are likely to slow in the near term, implying limited investment yield upside for insurers.
Sector trends: hurricanes to set course
- Supported by a strong bull run, global insurance stocks continued
to rise as several large insurers saw improved investment and
- Pick-up in long-term buy recommendations for U.K. and E.U. insurers reflect improved analyst expectations.
- Natural catastrophe (NatCat) losses: Active hurricane season is
expected to halt the relatively benign period of losses and limit
further pricing weakness that has persisted after 2012.
Tech disruption: blockchain rising
- Addressing the evolving nature of risk through innovation is a key
imperative for insurers.
- Blockchain has now progressed beyond pilot stage, with early
adopters looking to gain significant advantages.
- EY has taken a strong lead in helping insurers create a blockchain-based new-age information infrastructure.
Regulatory landscape: insurers prepare for impact
- Insurers need to initiate implementation plans to
effectively address the changes introduced by the new accounting regulations (including IFRS17 Insurance Contracts).
- General Data Protection Regulation (May 2018): With more than
half of the two-year post-adoption grace period now over,
insurers will have to act fast to address the impending challenges.
You can find the full EY report here.