More than one quarter of insurance companies globally are struggling to manage risk as a result of changes to the industry, according to State Street research.
A survey of more than 300 insurance executives globally found 29% of respondents have divested lines of business since the start of the financial crisis due to capital requirements or risk management considerations.
The corresponding percentages for Europe, the Middle East and Africa (EMEA) were higher at 39%.
State Street executive vice president and international chief risk officer David Suetens said: “The changing environment in the insurance industry is transformational: enhanced product design, changes in the distribution channels, regulatory demands and their investment practices.
“Consequently, the EIU survey highlights risk management as one of the most pressing areas of challenge for industry leaders. This new landscape places a laser focus on risk. When adjusting their business models, firms must confront the resulting risk challenges to successfully adapt to this exciting new environment.”
The survey – conducted by the Economist Intelligence Unit on behalf of State Street – also revealed 89% of insurance executives said improving the assessment and pricing of risk was a challenge, while 93% of respondents based in the Americas viewed this as a challenge with respondents in Asia Pacific and EMEA at 89% and 88% respectively.
Elsewhere, a quarter of EMEA respondents said they have difficulty in hiring knowledgeable, qualified risk management staff. This was considerably higher than the16% cited from respondents in the Americas.
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