At last month's gathering, there was genuine excitement in the room about the possibility of regulatory and tax reform, which could lower insurer expense ratios and bolster their bottom lines. The likelihood of rising interest rates raised spirits as well after years of historic lows that have undermined insurer investment income and profitability.

Last but not least, attendees were heartened by analysts predicting an acceleration in economic expansion, especially if campaign promises calling for significant infrastructure spending are realized. One analyst at the forum observed that even an additional 1 percent of GDP growth would likely translate into billions of additional premium dollars for carriers.

Downside risks also cited

However, despite the generally positive mood at the forum, caveats were also raised about potential downside risks. For example, rising interest rates — while good news for the investment side of the house — could be counterproductive in the long term if higher borrowing costs end up discouraging loans for new homes, vehicles, and business expansion, thereby cutting down on insurable exposure growth.

In addition, higher interest rates would likely strengthen the value of the dollar, possibly putting a crimp in U.S. exports — which could also suffer if threats to impose new tariffs are carried out. There were concerns raised as well about whether efforts to dismantle the Affordable Care Act might cause damaging "turbulence" in the health care sector, which accounts for nearly one-fifth of the American economy, according to data from the Centers for Medicare and Medicaid Services.

Related: Marsh's top 10 financial & professional market trends for 2017

Others noted that solutions are still lacking to address more systemic problems that could hinder the insurance industry's long-term growth. Among the issues raised was the aging American workforce and looming labor shortage (particularly if immigration is inhibited), the skills gap (especially in tech-related and data science jobs), ongoing disruption in European economies (most notably the fallout from Brexit), as well as the slowdown in China's economic juggernaut.

Insurers urged to be proactive on transformations, talent

In any case, rather than sitting back and waiting to see how the new administration's policies might or might not affect the economy, the regulatory environment, and the industry's growth potential, those at the forum emphasized that insurers need to be proactive and seize control of their own top- and bottom-line destinies. That means:

Innovating to improve risk segmentation, pricing, and the customer experience.

Leveraging new technology to streamline operations, improve efficiency, and cut costs.

Recruiting the talent required to pull off a game-changing digital transformation.

To generate more organic growth, insurers need to become masters at digital marketing, sales, distribution, and service. (Photo: Bigstock)

Increasing pressure from expense management

With margins shrinking, forum speakers warned that insurers are likely to face increasing pressure when it comes to expense management. Indeed, half of those surveyed at the event expect heightened merger and acquisition activity to be driven by the need to achieve economies of scale.

Related: What's on the horizon for P&C insurers in 2017?

As for the top line, insurers were told that to generate more organic growth they need to become masters at digital marketing, sales, distribution, and service. That's a tall, but necessary order with so many consumers doing much of their business online and becoming accustomed to life in an increasingly virtual economy.

As noted earlier, the dearth of human capital was also much on the minds of insurers in attendance. Forty-three percent of those surveyed at the forum agreed that "attracting the next generation of talent and skills" is the most important issue for the industry this year — the highest response rate by far.

Many at the event wondered aloud whether insurers have the bandwidth and/or the technical expertise to pull off digital transformations before others outside the business eat their lunch by deploying "better mousetraps" in the form of new business and operating models.

Skeptics in the audience were asked to ponder the fact that the nation's largest ride-sharing service and biggest temporary housing company do not actually own any of the properties being used by their customers, demonstrating how nontraditional disruptors can overwhelm legacy industries practically overnight.

One speaker said taking on the characteristics of an InsurTech company, at least in terms of mindset and culture, might help alleviate the talent shortage by attracting those currently turned off by the "boring" traditional insurance business, but perhaps turned on by the opportunity to transform an industry.

Role of state insurance regulators

State insurance regulators have their role to play as well. While continuing to focus on solvency and consumer protection, there was talk at the forum about how regulators are working to become more comfortable with analytics, InsurTech solutions, and new business models so they can properly oversee insurers looking to transform into more cost-efficient, customer-centric entities. Lots of disruptive developments don't necessarily fit into existing regulatory toolboxes, such as peer-to-peer insurance groups, attendees were told.

In the meantime, those at the forum were warned by their fellows to expect a lot of uncertainty and volatility this year, whether in terms of economic growth, interest rates, the equity markets, tax and regulatory policy, tech development, or disruptive threats. In other words, fasten your seatbelts, as it could be a bumpy ride ahead.

Related: Bring on the 'Year of the Wild Card'

Sam J. Friedman ([email protected]) is insurance research leader with Deloitte's Center for Financial Services in New York. Follow Sam on Twitter at @SamOnInsurance, as well as on LinkedIn. These opinions are his own.