Mark is a Partner at ReSource Pro Consulting.
If you were to ask us to describe the transformational activity of commercial lines insurers in the past few years, acceleration would be the first word to come to mind. But in 2023, another word may be more accurate—adapting. Economic pressures, such as inflation, are driving commercial lines insurers to rethink their strategic initiatives and adapt to new priorities.
Consider the results from a new ReSource Pro Consulting survey that shows that 12% of commercial lines insurer executives say their businesses are just in sustaining or surviving mode this year following a challenging 2022. The silver lining, however, is that insurers are inching back toward more aggressive strategies, with 30% indicating they are transforming. Although less aggressive than pre-pandemic levels, progress is underway.
Key strategic themes for commercial insurers in 2023
Our new research report, “2023 Strategic Initiatives: P&C Commercial Lines,” includes the results from a survey of insurer executives about their strategic plans in fifteen initiatives (seven traditional and seven transformational), as well as the biggest drivers for technology investments this year.
When analyzing the research from two lenses—trends in small commercial and mid/large commercial— we uncovered several major themes that define how commercial lines insurers are approaching strategic initiatives today, including:
- Balance is vital: Commercial lines insurers are more focused on efficiency and growth via their current business model, resulting in some insurers decreasing investments in specific strategic initiatives.
- Significant shifts in the workforce: Insurers across the industry adopted new workforce models during the pandemic, most prominently the hybrid model. In 2023, many are developing more comprehensive plans to address the continuing changes in the workforce and the evolution of roles.
- Mid/large commercial insurers are more aggressive: ReSource Pro Consulting’s research suggests that the mid/large commercial segment has become more aggressive with investing and executing several strategic initiatives, whereas small commercial insurers have become more conservative. However, it’s important to note that mid/large commercial insurers overall are earlier in the transformation journeys than their small commercial peers.
As the commercial lines ecosystem continues to evolve, small and mid/large commercial insurers must balance internal strategic goals with changing policyholder and agent expectations, business optimization, and cost containment amid economic uncertainty. However, the commercial insurance industry is well-positioned for future success as long as companies continue to innovate and transform in a rapidly changing world.
For more information on the traditional and transformational strategic initiatives of commercial lines insurers, including the plans of the small commercial and mid/large markets, read our recently published research report, “2023 Strategic Initiatives: P&C Commercial Lines.”
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