AI and Climate Change Top the Priorities of the Insurance Industry - Funds Society
AI and Climate Change Top the Priorities of the Insurance Industry - Funds Society
The International Insurance Society (IIS) has published the results of its 2024 Global Priorities Survey, revealing that, for the first time, artificial intelligence (AI) has emerged as the top priority in Technology and Innovation. More than half of the respondents highlighted its importance, marking a significant increase compared to previous years.
Despite AI’s potential to enhance operational efficiency, over a third of executives reported that their companies are not prepared for its rapid advancement. Concerns include the “slow adaptation of the sector to technological changes and the need for extensive retraining due to an aging workforce.”
The survey, distributed to nearly 20,000 senior executives in the insurance industry worldwide, provides a comprehensive view of the sector’s top priorities. These priorities span Economic, Political and Legal, Social and Environmental, Operational, Technology and Innovation, and Business and Financial categories.
On the other hand, climate change continues to dominate the Social and Environmental agenda, with 60% of industry executives prioritizing it for 2024.
The increasing frequency and severity of natural disasters pose significant challenges, including difficulties in predicting future losses and rising costs that could destabilize insurers, governments, and consumers. These risks are exacerbated by the fact that a quarter of respondents feel their companies are not prepared to address this issue in 2024, the study adds.
Regarding economic concerns, inflation remains the top priority for the third consecutive year, although fears of recession have decreased since their peak in 2022.
Cybersecurity remains a critical concern, with executives emphasizing the need for robust protection against emerging cyber threats related to AI.
The survey also explores growth opportunities, revealing that product innovation is the main focus for two-thirds of executives.
Most respondents plan to target new customer segments or underserved segments, while more than half aim to improve consumer trust and engagement. Encouragingly, nearly all respondents feel prepared to pursue these growth strategies.
The Global Priorities Survey will inform discussions at the 2024 Global Insurance Forum, which will take place from November 17 to 19 at the Hyatt Regency Miami.
Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”