Insurance companies fear insolvency after 2020 decline
Accenture has released a new report, stating that insurance companies look set to shrink following the 2020 global recession caused by COVID-19.
The multinational professional services company which reported revenues of US$43.2 bn last year, offers data-driven solutions to combat stagnation and discourage radical, knee-jerk cost-cutting which can be harmful to recovery years later.
The report, called Strategic Plays for Recession Recovery, explores the actions of 4,700 public companies. It also examines the finite balance of strategies historically, out-performing companies have employed, to ensure they remain solvent and stable in the event of a global crisis.
There is a section that examines the organisations that have thrived within the crisis environment too.
A statement released by Accenture said; “Looking at recessions past, we find time-tested strategies to help weather the recessionary storm and come out stronger. Research shows the actions that 4,700 public companies from various sectors took during the previous three global slumps.”
It goes on to reveal that a staggering 80% of surviving companies failed to match their pre-slump growth targets 36 months or more after the recession had passed and that only 9% of recession survivors had found themselves in an advantageous fiscal position after a downturn.
An analysis of data also shows strategies that assisted in recession recovery, and insurers that combined selective budget-cuts with strategic investments in sectors of competitive advantage, they were increasingly likely to grow and outperform once the recession finished.
The statement continues, “Time-tested patterns of success consist of structural cost improvements coupled with strategic investments to drive revenue. The approach outlined in our report is vital for insurers to successfully navigate the current environment and emerge stronger. Insurers that outperformed following the Dotcom bubble burst and Great Recession generally combined two key plays.”
Structural cost reduction and strategic reinvestment of savings are examined, as are time-tested data strategies that lead to an empowered approach to the crisis. The report goes on to look at areas of resilience and the latest innovative solutions to combat uncertainty.