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Overview
Unlocking the doors of opportunity
Today, the insurance industry is faced with working in an environment that’s rapidly changing and increasing in its complexity. We’re ideally placed to meet your changing demands and bring significant business advantage to our clients, through global multidisciplinary teams, integrated across-industry sectors, geographies and functional skills. We have the largest specialist insurance practice in Africa, focusing on assurance, tax and advisory services. When you combine those services with our experience, market knowledge and the strength of our global industry programme, we become a strong partner; helping insurance clients to succeed, from strategy to execution.
The main risks insurers face in 2019
PwC's Global insurance leader, Stephen O'Hearn discusses the Insurance Banana Skins 2019 survey and the biggest concerns faced by the insurance industry across the globe and South Africa.
Listen to PwC Partners Alsue du Preez and Steven O'Hearn discuss the main risks insurers face in 2019.
How we can add value
- IFRS 17
- Customer Experience
- Cost containment / Productivity
- Tax issue
- Sustainable Development - Redefining business success
IFRS 17
Ready on time for IFRS 17 - it's closer than you think
IFRS 17, effective from 1 January 2023, will be a major challenge for the insurance industry, fundamentally impacting businesses well beyond the finance, actuarial and systems development areas. This extends to areas like product design and distribution, development of revised incentive and wider remuneration policies and reconfigured budgeting and forecasting methodologies feeding into business planning.
IFRS 17 presents opportunities to harness data more effectively, improve the structure of your finance function, and better inform your decision making.
In the build-up to 2023, much work needs to be done. Every business has different aspirations and is at different stages of the journey, so whatever you want from IFRS 17 and wherever you are now, we can help you face IFRS 17 with confidence.
Customer Experience
Digital is key to customer connection. So far, insurance companies have focused on digitizing and automating processes. Customers are becoming accustomed to digital solutions in the purchase or claims processes, but how they interact with their insurance company hasn’t really changed. The next step in the evolution is that technology and use of data will impact the business model and entire customer dialogue. This is the real transformation of the customer experience.
We can help you on your journey towards an improved customer experiences by moving from return on investment, to return on experience - a comprehensive system of metrics to guide the creation of value by investing in the experience of customers, employees, and leaders.
Cost containment / Productivity
Factors like increased customer expectations, new regulatory demands, aggressive fintech competition and decreasing interest rates have put pressure on the insurance industry, and led to unsustainable cost-income ratios. This is apparent in the high average expense ratio and low ROE within the industry, which has virtually exhausted its arsenal of conventional cost-reduction tools such as reducing expenses, personnel automation, outsourcing/offshoring and introducing new technology.
Improving productivity is key to unlocking value for insurers, and we can help, particularly in these six areas:
- Better understanding the workforce
- Rethinking change functions
- Embracing the platform economy
- Improving workforce digital IQ
- Bringing an agile mind-set to the mainstream
- Mastering digital labour
Tax issue
Insurance tax is highly complex and requires a deep understanding of the industry and a wealth of experience and technical expertise. Changes to the insurance regulatory and tax landscape place tax on the board agenda of leading insurers. It’s anticipated that with IFRS 17, the tax legislative environment will continue to shift.
Tax risk is inseparable from business risk and its management needs to be a key priority in an insurer’s overall risk management policy and indeed its digital transformation strategy. GRI 207, effective in 2021, will also require more transparent disclosures relating to tax and companies will need a strong business partner who can help develop a holistic approach.
Our Insurance Tax team’s global footprint and focus on digital innovation, helps insurers stay ahead of the curve. We’re able to have one tax conversation incorporating all angles, helping you solve important problems.
Sustainable Development - Redefining business success
Sustainability risks are top of the World Economic Forum’s identified global risks. While building trust through better communications is one approach, the future value of an insurance business will be strongly tied to:
- Demonstrating responsible investment practices: Long-term investors should consider their investments through the ESG lens to assess risks and generate sustainable risk-adjusted returns.
- How well ESG risks are managed: Weather and natural catastrophe events make this an urgent industry concern, from managing the undermining of insurance pricing models, to product innovation.
- Embedding an approach to optimise value: Related to the Sustainable Development Goals, internal monitoring and external communications need to record the story of contribution. This requires refinement of strategy and quality performance information beyond traditional metrics.
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