According to the Insurance Market Outlook 2019 report by the international consultancy and audit company Ernst&Young, technology and innovation will be the key to driving agile growth in the insurance market this year. The market is expected to grow by 3 percent by 2020.

Ernst & Young has announced the results of Insurance Outlook 2019 report which examines the trends dominating the insurance market. The regional reports covering the US and Americas, Asia-Pacific and Europe are the result of several think tank sessions conducted with industry and functional professionals, as well as strategists and technologists. Overall, the report found that global insurance sector growth is expected to remain stagnant. However, the report emphasizes that insurers must focus on technology and innovation initiatives to optimize costs, expand distribution channels, enhance market accessibility and discover niche segments in local markets. Globally, insurance market is expected to grow around 3 percent between 2018 and 2020.

Insurers invest in transforming their business models

Damla Harman, Partner and Leader of Financial Sector at EY Turkey, commented on the results of the report and said: “Insurance market is going through an exciting transformation process. On a global scale, insurers are investing in transforming their business models to make use of growth opportunities emerging as a result of digitalization. We expect digital transformation to make sure that technology is utilized much more efficiently in the insurance market, to reinforce market’s capacity to encourage financial welfare, and change its working culture.”

Regulations and changing customer needs are the driving forces for market growth

Globally, life and property & casualty insurance have experienced a horizontal growth pattern, while non-life/P&C insurance sectors have had better performances in Americas and Asia-Pacific markets. Report results indicate that on a global scale, life insurance companies are facing challenges in terms of growth as they fall short of addressing regulatory issues and developing new products to meet changing customer needs.

Digital transformation does not suffice on its own

Insurance Outlook 2019 Report reveals strategic actions to help insurance market overcome these problems, stating that the market should comply with regulatory amendments to encourage growth and digital transformation does not suffice on its own. According to the report, insurers should extend their value propositions to develop financial wellness, partner with InsurTech companies to increase their access, and develop products with an innovative approach.

Health and cyber insurance markets growing rapidly in Asia-Pacific region

The report emphasizes that non-life/property & casualty sector has grown considerably; but estimations that global economic slowdown will continue may pose a negative impact on the market in the coming term.

Use of advanced technologies such as artificial intelligence (AI) and Internet of Things (IoT), adaptation to rising customer expectations, partnering with InsurTech companies for innovation and market access and discovering niche segments that grow rapidly such as health and cyber insurance in the Asia-Pacific region will present great opportunities for the insurance market in the coming term.