Tech and cyber threats are biggest risks for insurers globally: survey

Regulation drops out of top 5 concerns for first time in 3 years

Technological change, structural change and cyber threats are the biggest risks North American and global insurers face, according to a survey from the CSFI and PwC.

Of the 836 insurance professionals (including 38 Canadians) who were surveyed in 52 countries, they felt their biggest threats are structural changes like digitization, competition, consolidation and cost reduction. The North American insurance industry aligned with this result, as U.S. and Canadian respondents highlighted structural and technological changes and the threat of cyber attacks, says the report.

In Canada specifically, the top three risks for the insurance industry, according to survey respondents, are: change management, technology, and cyber risk.

The CSFI report, called the Insurance Banana Skins 2017 survey, revealed that the global industry found cyber risk to be the second biggest concern. Insurance practitioners worry about being the subject of a cyberattack and the risks in underwriting cyber crime. Other major concerns include the adequacy of insurer’s internal technology systems and new competition, particularly from the InsurTech sector.

Regulatory risk, which was the top threat for the past three editions of the report, didn’t make it into the top five this year. According to PwC, this could be because regulatory changes are being accepted as “business as usual” at this point in time.

“For the first time in six editions of this survey, operating risks pose the greatest threat to insurers. Structural and technological changes to the industry could upend traditional business models. At the same time, insurers are grappling with a very difficult economic climate, which helps explain why anxiety is at an all-time high,” says David Lascelles, the survey editor, in a press release.

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