The global economy is likely to suffer a marked decline in 2020 due to the COVID-19 pandemic. The severity of this recession is still to be determined. Yet, we already know that impulsive cost reductions fail to guarantee survival for insurers and might become pitfalls on the pathway to recovery.
In our latest report, Strategic Plays for Recession Recovery, we explore the delicate mix of actions that previous outperformers have taken to remain stable during, and come out stronger after, recessionary times.
A look at recession winners
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.
The actions taken by the observed companies during the three previous global recessions had these results:
Deeper analysis on the insurers within this group reveal strategies that helped in recession recovery. Insurers that combined selective cost-cutting with strategic investments in areas of competitive advantage were more likely to emerge stronger than before and outperform competitors.
Turn challenges into profitable growth
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:
Acting with a time-tested, data-driven strategy can empower insurers with the insights they need to devise, refine and implement a winning strategy. While each insurer will need a unique approach, certain "no regret" measures may apply under all scenarios and help build long-term resilience.
A crisis can come in any form and seemingly out of nowhere. We have both the insurance industry expertise and innovative solutions to help your insurance business weather the recession, outmaneuver uncertainty and outpace competitors.