‘Sustainable growth will rely on balancing technological advancement with trust, customised solutions and regulatory adaptability,’ says global head
Insurance firms need to build operational resilience and efficiency, utilise artificial intelligence (AI) tools and develop customer-centric operating models to survive in a modern world of global uncertainties.
That was according to the inaugural insurance outlook report by financial services consulting firm Alpha FMC, released today (3 April 2025), which suggested that short-term profitability pressures, driven by a softening market, must be balanced against a robust long-term strategy.
The key to this, the report said, involves technology-driven underwriting, cloud modernisation, cyber security, agility around emerging risks and a focus on operations and talent.
Britton Van Dalen, global head of insurance consulting at Alpha FMC, said: “Those that leverage AI-driven underwriting and data analytics will streamline operations, enhance customer satisfaction and unlock new revenue streams, driving long-term profitability.
“At the same time, escalating risks, from climate change to cyber threats, demand immediate investment in advanced modelling and mitigation strategies.
”As highlighted in our outlook, sustainable growth will rely on balancing technological advancement with trust, customised solutions and regulatory adaptability.”
Product innovation
The report also highlighted that product innovation ”needs to be at the forefront of the 2025 agenda, ensuring there is sufficient flexibility within an insurer’s offerings to meet customers’ needs and their expanding preferences”.
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”Given the climate challenges being experienced globally, differentiated solutions must be considered to support coverage gaps, including the usage of parametric insurance, to accommodate high magnitude events.
Parametric insurance is where the trigger and claims payout are preset, meaning claims processing time is reduced.
The report added: ”Insurers who can adapt to their customers and scenarios, and ensure their products are not rooted in the past, will succeed.”
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