Majority of insurance bosses say innovation is key to risk mitigation

More than half (58%) of insurance industry executives feel that innovation plays a key role in mitigating risk, a new survey has revealed.

The survey, which was published in technology and solutions provider FIS, also found that 53% of bosses said that they were planning to pursue technology and systems innovation in the next 12 months.

It came as business leaders in the UK revealed that they face more risk now than in the past, with financial risk being the top concern for 62% of respondents.

Some 63% of insurance firms, meanwhile, were found more likely to have been affected by environmental and transition risk, with 46% of insurance executives citing this as a concern.

To help mitigate risk, a total of 51% of businesses within the insurance sector said they had started to innovate their customer experience, while 35% had applied some sort of innovation to operating models.

Melissa Cullen, FIS’ banking and decisions solutions division executive, said: “Every advance in technology creates new opportunities to innovate, while simultaneously introducing new threats.

“While nearly half of executives believe their risk has increased, we should expect that number to climb as the pace of technological innovation accelerates. It’s all about balancing risk and reward through strong governance frameworks as we look to reap the benefits of emerging technologies.”

New hires

The survey, which was published in FIS’s Global innovation report: Creating innovation in uncertainty, asked more than 2,000 global business leaders across different sectors on their views of innovation.

While budget was named as the main blocker to innovation for 51% of insurance executives, several had started to make new hires in a bid to tackle risk. 

Some 30% hired new staff and 43% used outside consultants, while 45% assigned existing staff to help with new innovation,

And more than half (56%) of insurance executives felt confident that they could overcome challenges and risks faces, while 40% were somewhat confident.

Tony Warren, FIS’ global strategy division executive for capital markets, said: “Early adopters are more confident and no wonder. Whether it’s next generation artificial intelligence (AI) tools or regulatory technology, deploying the latest technology is the best way to protect the business from high levels of risk.

“Couple that with internal ownership of risk and companies can be more confident – even as they face a range of ever-changing challenges.”