Explore With Us - Market trends of the future

 As the theme suggests, industry is entering a new dimension of risk which we must all be prepared for. From sustainable economy and green mobility to digital transformation and disruptive technologies, there are several new and emerging trends to consider. 

To best prepare ourselves and our customers, we have developed the AGCS Trend Compass 2019, which identifies and rates the key future market trends, providing in-depth expertise and orientation on those that will have the strongest influence in the next five to 15 years.

Among these trends are two segments which strongly connect to topics we will explore at workshops and panels at the FERMA Forum 2019: Sustainability and Digitalisation. 

Corporate sustainability is changing the world of business, with companies increasingly being held responsible for how their operations impact the environment, natural resources and the climate of our planet. Some of the key sustainability trends we anticipate between now and 2034 are:

1. Circular Economy – aiming to eliminate waste and advocate the continual use of resources. A circular economy is a system by which used products are reintroduced into the production cycle as secondary raw materials. 
2. Green Mobility – businesses will need to consider mobility and supply chains in terms of sustainability, and ensure their processes are as ‘green’ as possible – e.g. fossil-free vehicles and energy storage devices.
3. Smart and Sustainable Cities – aiming to make urban growth environmentally sustainable, smart and sustainable cities will require energy-saving building construction, reductions in inner city traffic, recycling of water and materials and the local production of energy and food in order to reduce transport and CO₂ emissions and increase inhabitants’ quality of life.

Allianz is fully committed to promoting the global transition towards a low-carbon economy. Achieving the 2015 Paris Climate Agreement requires a rapid and full decarbonisation of the economy. As a leading insurer and investor, Allianz plays an important role in this global effort. In May 2018, we joined the Science Based Targets initiative (SBTi), committing to set long-term climate goals for our operations and our proprietary investments in line with the Paris Climate Agreement. We also withdrew from insuring single coal-fired power plants and coal mines in operation or planning. We are committed to a full phase-out of all coal-based business models from our proprietary investments and Property & Casualty insurance portfolios by 2040 the latest.

Digitisation is drastically changing the way we do things, and the insurance industry is no exception. The biggest market trends we expect to see include:

1. Artificial Intelligence – according to Accenture, AI technologies are projected to boost corporate profitability in 16 industries across 12 economies by an average of 38% by 2035. The rise of AI, as AGCS documented in a recent article, is transforming industry and society, bringing benefits such as increased efficiencies, new products and fewer repetitive tasks, as well as potential threats to the labour market, security, and the environment. [1]
   
2. Quantum Computing – the next generation of computers will be based on the laws of quantum mechanics. These quantum computers have the potential to be 100million times faster than a traditional computer, enabling the acceleration of database searches and the interpretation of encryption technologies. This may facilitate the much speedier calculation of risk.
   
3. Predictive Services - a form of advanced analytics [1] that examines data using statistics, modelling, and machine learning in order to enable the anticipation of future events and user needs, the prediction of natural disasters or accident situations, and the elimination of causes or contributory factors. For example, predictive services could be implemented to detect buildings at risk of fire or to predict the likelihood of a hurricane, cracks in machinery equipment, or future liability scenarios like Asbestos. 

AGCS leverages new technologies to enhance the efficiency of our processes, our risk analysis capabilities and our delivery of customer services. However, the real challenge is to determine which of the new breakthroughs make sense for our customers, and for us as their partners in managing risk.

Assessing twenty-five trends in six different categories including Socio Economy, Artificial Intelligence, IT Infrastructure and Cities & Mobility, the AGCS Trend Compass is a new strategic tool to help companies navigate the complex, developing landscape of opportunities and risks.