Megatrends are permanently changing our business segment

We want to see a sustainable increase in our relevance in our customers’ lives based on this healthy starting position. This guiding principle forms the starting point for our new UNIQA 3.0 strategic programme. If we are to meet this objective, we need to evolve further once again. Yet the focus has changed. It is not enough for us to be just an insurance company. We must and we also want to become more than that.

To begin with, we looked at the question of what the future will be like for people in general. Therefore, we closely examined the most significant global megatrends and their impact on our business. We used the results to create the UNIQA World Picture 2030, which also forms the basis for the UNIQA 3.0 strategic programme.

Low interest rates and a shift in economic power

In addition to the consistently low levels of interest rates, we are about to see one of the biggest crises ever to hit the real economy due to the Covid-19 crisis. We are already feeling the effects of the low interest rate policy in many areas: housing and pension provision are becoming more expensive, with wealth distribution becoming more unequal, and the concentration of wealth increasing. Public debt is growing at an alarming rate in Europe, and we can only imagine today the burdens that this will place on our society in future.

Demographic and social change

People in Europe are getting older and having fewer children. The need for private provision is increasing. The population could decline from 160 million in 2019 to 153 million in 2030, for instance in UNIQA’s core markets according to current estimates. There are several reasons for this: net migration and fertility rates are falling, while the mean age is rising. Around 25 per cent of the Austrian population will be 65 or older in 2030. The trend towards urbanisation is also expected to increase despite the coronavirus pandemic: 60 per cent of the population in Austria lived in urban areas in 2018; this figure may reach 70 per cent by 2050.

Innovation and digitalisation

Digitalisation provides opportunities, but also causes upheaval within society and the economy. Competitors from outside the industry are intensifying the competitive environment. Automation and artificial intelligence will replace humans in many areas; conversely, new job profiles will also emerge. The automation of standard manual activities and use of artificial intelligence represent the two main areas here. A remarkable 40 per cent of activities currently carried out by humans could be automated. A trend can also be recorded towards increased cooperation. There will be more partnerships for instance between full-service insurance companies and FinTech start-ups: the proportion of 32 per cent in 2016 compares with 45 per cent in 2017, and this proportion is expected to continue to rise significantly to 82 per cent between 2020 and 2023.

Climate change and sustainability

Resources are becoming scarcer and climate change already represents a major challenge to us in the areas of agriculture and human health. New solutions need to be found. The annual damage caused by flood events in Austria will increase from an average of €400 million to a predicted €1.6 billion by 2065. The requirements related to climate protection are increasing in this context: the EU has set an objective of reducing emissions by 40 per cent by 2030 as compared with the levels from 1990 and making Europe the first climate-neutral continent by 2050. The trend towards urbanisation is intensifying: 60 per cent of the population in Austria lived in urban areas in 2018; this figure will reach 70 per cent by 2050.

These megatrends are having a major impact on the structure of society and the macroeconomy, as well as on people’s behaviour and their relationship with consumption, plus their expectations related to insurance. This means that our business and our “ecosystems” of health, provision, housing and mobility are also being significantly affected.