A new report from PWC has highlighted recruitment, regulations, and crime as being among the key challenges faced by New Zealand insurers.
The 15-page report – Exploring the Insurance Industry’s Top Risks – identifies a rising level of anxiety about cybercrime, heightened by Covid-19 which introduced new opportunities for criminals to exploit.
“Insurers operate in an increasingly interconnected world of digital opportunity and while technology can drive innovation and productivity, it also presents new risks and challenges that need to be understood and overcome,” states the report.
With regard regulation, PWC says concerns include the new financial conduct regime, enhanced regulation of financial advice, and ongoing reviews of the Insurance (Prudential Supervision) Act 2010 (IPSA).
“The task of addressing and implementing these new regulatory standards, in the mandated time frame, is proving to be a challenge for insurers,” says the report.
“While globally, insurers are concerned that increased regulation is hampering product innovation and competition, in New Zealand the concern is more around the sheer volume of upcoming change, and the accompanying cost.
“As one New Zealand respondent commented ‘There is a significant portfolio of regulation in the pipeline, which may impact on the size and shape of the industry and costs of implementation’.”
Industry concerns about climate change is also listed as is the risk of insurers failing to keep up with technological change.
The report cites what it says is widespread concern about insurers not being able to serve the needs of a new generation of customers through modern distribution channels.
“Many insurers have grown inorganically through acquisitions and need to deal with ageing legacy systems that don’t integrate well with digital front ends,” states the report.
And with a critical shortage of people to do the work in New Zealand – 50,000 migrants left the country in 2021 – human talent remains a concern for HR departments across the country.
“These challenges have been sharpened by Covid-19 border closures and travel restrictions,” states the PWC report.
“However, the difficulty in attracting global talent to New Zealand is second to concern about what has been dubbed ‘The Great Resignation’. The global pandemic has made many people rethink the role of work in their lives and some are voluntarily leaving their jobs in search of change.”