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The outlook for General Insurance in 2019

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​The last 12 months have seen significant shifts in the General Insurance landscape, following on from an extraordinarily busy 2017. The market continues to respond to developments in technology, foreign investment and the ongoing war for talent, in addition to some very sizeable merger and acquisition activities across the globe. As such, we’re experiencing a robust marketplace with significant opportunities for clients and candidates alike. Here’s what you can expect to see from General Insurance in 2019.

Continued M&A activity 

Despite the loom of Brexit, the impact of GDPR and an enhanced focus on regulation across the industry, there’s still a strong appetite for major mergers and acquisitions throughout General Insurance. In 2018 we saw theMarsh-JLT merger, a £4.3 billion move from the world’s biggest insurance broker as Marsh & McLennan continues to expand its global presence in niche insurance areas. AIG’s US$5.5 billion purchase of Validus and AXA’s US$15.3 billion XL Group Acquisition are further evidence of accelerated large-deal M&A activity, with a particular focus on speciality and niche areas.

A continued uptick in M&A is expected in 2019, particularly within UK domicile markets, thanks largely to market pressure to achieve growth, improving global economies and an upturn in interest rates. However, we know that rising interest rates carry risks and can lead to more expensive debt, so this may temper M&A activity somewhat.

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InsurTech continues to rise 

The role of InsurTech within the General Insurance space increased significantly last year, with investment in the InsurTech sector increasing at a CAGR of 36.5% between 2014 and 2017. The majority of insurance professionals believe InsurTech could help to redefine customer experience and bring in new business models, and Deloitte recommends insurers consider backing InsurTechs in order to accelerate product development.

InsurTech can introduce new approaches, platforms and policy designs, and with AI, the cloud and blockchain all becoming staples of the modern workplace, insurers must keep pace with modern technologies. And while technology may make some processes more efficient and automated, the need for human intelligence is stronger than ever. Underwriters, brokers and other insurance professionals who see technology as an opportunity, rather than a threat to their livelihood, and upskill accordingly will likely see more opportunities than those who resist change.

Movement from Lloyd’s

Following an aggregated market loss of£2bn in 2017, Lloyd’s launched a strategic review of its business last year, with an emphasis on syndicate lines and parameters. Pledging to exit poor-performing syndicate lines to maintain market efficiency, Lloyd’s led the way for primary insurers and reinsurers to exit risky markets and focus on those syndicates which are market-leaders. This means professionals need to be of a higher calibre and understand risks more than ever, particularly with the enhanced regulatory focus from the FCA ongoing this year.

Increased demand for niche roles

As the niche and speciality General Insurance space surges forward, so too does demand for highly skilled candidates in this area. Time-to-hire has improved in many firms, as employers move quickly to secure coveted talent in niche roles. As always, there are simply not enough highly-skilled and qualified insurance professionals to fill speciality roles, which has led to a war for talent amongst the big insurers and boutique businesses alike.

Salaries remain strong, and as insurers become more agile and nimble in the way they work, we’re seeing many looking for talent outside of the General Insurance industry. Financial lines are considering accountancy backgrounds, transactional liability lines are looking to legal markets and even candidates from construction, surveying and architecture are being considered for insurance roles within this niche area. A lack of training from big insurers and the desire to introduce fresh ways of thinking means insurers are looking elsewhere to plug resourcing gaps. This, combined with the rise of InsurTech, proves that insurers must stay close to the revenue and anticipate market trends in order to remain competitive. Creative, agile businesses that aren’t afraid of change will rise to the top as the market continues its evolution.

How IDEX Consulting can help 

Our team has an in-depth knowledge of the General Insurance industry, and always has an eye to the future. We know that candidates and companies alike need to be nimble, forward-thinking and prepared to embrace and work with new technologies, and we pride ourselves on matching the right talent to the best opportunities.

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