FORECAST 2024: Business Disruptors
What has the greatest potential to disrupt business as usual at your organization? MarketFacts recently asked that question as part of its annual Forecast survey, and the answers of participating industry executives are enlightening.
Several Forecast participants say evolving regulations have — and will continue to — disrupt business in the insurance industry, citing algorithmic accountability and the Department of Labor fiduciary proposal as examples.
“Regulation, in particular around algorithmic accountability, has the potential to disrupt business operations as we ensure compliance while matching price to risk,” says Joe Monk, SVP, Financial Services, State Farm. “Also, recent proposals around fiduciary standards have the potential to disrupt access to retirement advice for customers, particularly those in the middle market.”
State regulations also can be disruptive. “While paid family leave legislation at the state level has been a growth opportunity in the workplace benefits business,” notes Mike Simonds, Chief Operating Officer, Unum Group, “other changes are more problematic.”
Executives also are concerned about the possibility of a deep recession in 2024, which certainly would upend business as usual. Recessions place significant pressure on consumers’ budgets, which slows demand for an array of products, including insurance and retirement products.
On the technology front, all eyes are on artificial intelligence (AI), especially generative AI.
“Top of mind for many people are changes enabled by AI, both the continued advancement of machine learning and, of course, the arrival and evolution of generative AI,” notes Amy Friedrich, President, Benefits and Protection, Principal Financial Group.
“AI could have a complex and as yet, hard-to-predict set of impacts, both positive and negative, on the industry,” adds Adrian Griggs, EVP & Chief Operating Officer, Pacific Life. “These could be in the form of new competitive dynamics (external) or operational opportunities and challenges (internal), including much greater efficiency.”
Fraud and cyberattacks will continue to be major business disruptors worldwide.
“Cyberattacks continue to be a primary concern among many industries, especially insurance,” says Wade Harrison, EVP & Chief Retail Officer, Protective Life. “According to a 2023 risk scenario from Lloyd’s of London, a cyberattack on a financial services payment system could impact the U.S. $1.1 trillion in losses over a five-year term. To maintain customer privacy and mitigate business disruptions, insurance companies are working more diligently than ever to protect their company and customer data from a cyberattack.”
Forecast survey participants also mention current geopolitical tensions, changing consumer/agent expectations, new industry entrants such as alternative asset managers, sustained talent mobility, and elections — in particular, the 2024 U.S. presidential election — as potential business disruptors.
Business disruptors are here to stay. What to do?
“The greatest disruptors to business as usual should be the evolving needs and expectations of our potential clients,” says Mark Holweger, Chief Executive Officer, Legal & General America. “As an industry, we need to continue to be more obsessively curious about those we want to serve and find new ways to partner and meet their needs. The larger trends around mergers and acquisitions (M&A), insurtech, etc., are trying to meet those needs, and carriers should be prepared to partner differently with experiences, platforms, connectivity and even product flexibility in support of individuals, families and businesses.”
“Disruptions are occurring everywhere, from tech and cyber challenges to geopolitical unrest and market volatility,” says Kamilah Williams-Kemp, EVP & Chief Insurance Officer, Northwestern Mutual. Her advice? “It’s critical for leaders to evolve their mindsets. If you accept that a major disruption will come eventually, you can begin to consider ways to position the organization to nimbly respond and even act opportunistically when changes come. That creates a competitive advantage that cannot be replicated by others who failed to plan ahead.”