GLOBAL INSURANCE REPORT 2020
GLOBAL INSURANCE REPORT 2020

Insurers see the future

360 senior insurance executives across the globe share their insights into how the pandemic is fundamentally reshaping the industry and their investment approach. Our interactive report charts key themes and global and regional implications.
Download full report Download full report
A fundamental reshaping of the insurance industry in four themes
The pandemic has put an additional layer of pressure on an industry already in flux and accelerated existing trends. The near future will require significant management decisions on how to reinvent business models and where to invest centered on four key themes.
73% of respondents believe the pandemic will pose existential risk or necessitate fundamental change.

Source: BlackRock Global Insurance Survey, June-July 2020. Base: Global (n = 360).

Embracing digital transformation
Embracing digital transformation
Technological change and a more flexible and tech-enabled workforce open up new possibilities to create value across the business.
Reinventing business models for a post-COVID world
Reinventing business models for a post-COVID world
Insurers envisage a more flexible, targeted product offering with closer policyholder engagement in an environment of low rates and significant pressure on policyholders.
Enhancing portfolio flexibility to promote resilience
Enhancing portfolio flexibility to promote resilience
Insurers look to combine a focus on quality with higher diversification, and increased portfolio flexibility with strong governance.
Prioritising sustainability objectives
Prioritizing sustainability objectives
The vast majority believes the COVID experience is accelerating their focus on ESG, with, for many, a greater emphasis on social and governance aspects.

We visualize each theme and its global and regional implications in our interactive report, complemented by comments from your peers and BlackRock experts.

Download full report

01 Embracing digital transformation

69% of insurers plan to prioritize technology investment in response to a permanently changed environment. Technology offers the prospect of getting closer to the customer through digitally enabled policyholder engagement and distribution platforms.

62% cite risk management concerns as a significant challenge for their investment teams in the work from home environment and technological resilience is a major focus.

Technological change and a more flexible and tech-enabled workforce open up new possibilities to create value across the business from operations through to digital distribution.

Technology is enabling the industry to change

Q: Do you foresee any permanent changes in investment team operations, technology platforms or working patterns following the post-COVID normalisation?

Q. Do you see any permanent changes resulting from COVID?

 

Source: BlackRock Global Insurance Survey, June-July 2020. Base: Global (n = 360).
The respondents selected their top three answers.

02 Reinventing business models for a post-COVID world

More than 60% envisage a more flexible, targeted product offering with closer policyholder engagement in an environment of low rates and significant pressure on policyholders following the pandemic.

Improved coordination between product and investment teams is essential as insurers redesign the end-to-end process of their product offering and offer new forms of coverage. Specialized pandemic risk coverage and life insurance with an investment focus are priorities for life and multiline insurers.

Insurers would like to see changes to capital treatment and accounting rules post the crisis to ensure better alignment with underlying risk and long-term holdings respectively.

Revisiting product priorities

Q: To respond to your customers’ evolving needs, which of the following products and services would you prioritize in the next 2 years?

Q. Which products are you prioritising over the next 2 years: Global (life and multi-line insurers only)

Source: BlackRock Global Insurance Survey, June-July 2020. Base: Life and Multiline insurers only (n=175). The respondents selected their top three answers.

03 Enhancing portfolio flexibility to promote resilience

Circa 60% look to combine a focus on quality with higher diversification, and increased portfolio flexibility with strong governance.

Risk appetite is remarkably robust with 47% wanting to increase risk exposure. Insurers view geopolitical risk and weak global economic growth as the most serious macro risks, while asset price volatility and liquidity risk are considered to be the major market risks.

Strengthening credit quality and diversification have been the biggest adjustments to investment strategies following the crisis. Insurers intend to increase cash holdings at the expense of public market allocations, but target exposures to multi-alternatives and select private market investments. They have to balance these exposures with liquidity concerns and a desire for greater resilience.

Repositioning for prolonged low rates

Q: What steps have you taken in the past 12 months to position for a prolonged period of low interest rates?

Q. What steps has your organisation taken to better position for low interest rates?

Source: BlackRock Global Insurance Survey, June-July 2020. Base: Global (n = 360).
The respondents selected their top three answers.

04 Prioritizing sustainability objectives

78% believe the COVID experience is accelerating their focus on ESG, with a greater emphasis on social and governance aspects. Insurers increasingly invest in specific ESG strategies and consider ESG risk to be a key factor when assessing new investment opportunities.
When our Global Insurance Survey uncovered ESG a central theme in 2018, many companies were still struggling with the concepts and what that meant for them. Today, the global industry and chiefly its most advanced companies are leading a charge that is transforming the ways in which to invest and manage risk. ESG considerations are penetrating investment decisions deeply.

Putting ESG into action

Q: Thinking about ESG, have you done any of the following?

Q. Thinking about ESG, has your firm done any of the following?

Source: BlackRock Global Insurance Survey, June-July 2020. Base: Global (n = 360).

Discover the Global Insurance Report 2020
Global insurers share their views on how 2020 is reshaping the industry and their investment approach through digital transformation, redesigned business models, portfolio flexibility for great resilience and the prioritization of sustainability.
Download full report Download full report
Download BlackRock’s 2020 insurance report.