Insurance Banana Skins 2015

The CSFI Survey of the risk facing insurers

This is already the fifth ’insurance banana skins' research project - and it is one of the most interesting! This research - conducted every two years in collaboration with Centre for the Study of Financial Innovation (CSFI) - is aimed at senior executives in the insurance industry around the central question: "What risks do insurers face and how do they prioritize those risks?"

In the Netherlands, the following risks form the top 3:

1. Low interest rates
2. Reputation
3. Guaranteed products

Low interest rates are regarded the highest risk, and the expectation is expressed that this will not change in the short term. More striking is the fact that reputation risks in the Netherlands are estimated to be much higher than in other countries. This stems from the ‘woekerpolis’ affair, whose consequences are still felt on a daily basis. Guaranteed products are relatively common in the Netherlands and in combination with low interest a relatively greater risk for Dutch insurers.

Worldwide there are clear differences. Even though there has been an important shift in the risk perception of the insurance industry, regulation tops the survey for the third year running.

1. Regulation
2. Macroeconomic risks
3. Low interest rates

The survey identified that there is a widespread fear within the industry and among observers that the volume of the regulation is swapping the industry and is calling into question longstanding strategic certainties. This risk is followed by Macroeconomic Risk and Interest Rate Risk (new entrant) in terms of the global findings.

The new Banana Skin Cyber Risk is ranked as number 4 of the survey (and ranked as 1 in non-life insurance sector), as more business moves to online and mobile channels, and insurer's vulnerabilities to hacking, fraud and data compromise continue to amount.

As you will see in the paper, in general terms, there had been some important changes in terms of the risks identified by insurance practitioners and observers, which may lead into different strategies needed by the market.

Insurance Banana Skins 2015 was conducted among more than 806 respondents in 54 countries worldwide. In the Netherlands, 42 industry representatives participated in the study. For more information on this report and the Dutch results, please contact Bas van de Pas.