Challenges and opportunities in a dynamically changing environment

The insurance industry is trying to balance the challenges from the macroeconomic environment after and stabilization of markets, the investments in digital technologies and automation, the extreme weather events, and the cost of reinsurance and all this under the light of strict and ever-increasing regulatory compliance and intense competition.
 

Acquisitions and mergers

With interest rates stabilizing, insurance organizations are expected to shift from a passive acquisition approach to a more strategic one by divesting non-core or non-performing businesses, to acquiring businesses that offer new opportunities both in terms of revenues-market share and cost reduction per unit.

Despite the significant number of recent Deals, we believe that this trend will continue strongly, especially in markets such as Greece, because the number of multinationals remains large in relation to their size or market size where the existence of an insurance company and commitment of high-risk capital is not supported by best practices or investment strategies.

Considering the transactions that have taken place in recent years, we believe that the interest is there, and the money offered is satisfactory, supporting a momentum of opportunities that should not be left untapped, especially by smaller market players. If the size or organic profitability is not satisfactory or the maintenance of any adequate profitability level is not supported through the necessary investments, then disinvestment and alternative use of funds is considered an optimal investment option.

The one-way road for digital transformation with technical intelligence

The Insurance Industry has realized the importance of digital transformation with AI. Management and shareholders expect that AI can revolutionize day-to-day operations from both automating claims and underwriting shifting focus on communicating with policyholders, to enable efficient and accurate pricing and accurate decision-making. Every company operates differently so how AI can be implemented varies.

Attracting and retaining talent

Finding and retaining technology-enabled employees is also a strategic choice for insurers seeking to create a customer-centric business model that requires the collection and management of valuable data, with the biggest challenges facing smaller companies. To address the talent shortage, employees with sufficient knowledge of new technology should be attracted, but at the same time upskilling existing employees.
 

Risks from extreme natural phenomena and opportunities

Severe extreme weather events in 2023 highlighted the importance of insurance. The frequency and severity of natural disasters have led to higher insurance claims and losses for insurance companies and the public states. Worldwide and mainly in the USA, some large companies have withdrawn from regions while insurance premiums have increased around the world and in Greece too. This trend is expected to continue in 2024 and the following year as well.

Prospects

The insurance industry has a promising future if it is flexible and innovative in its approach. By embracing new technologies and meeting the changing needs of customers, insurance companies can remain competitive in a rapidly evolving landscape.