Life and Non-Life Insurance

Changing world

Insurers have experienced dramatic changes over the past decade, with booming stock and labor markets, followed by an unprecedented downturn and a two-speed recovery in which developed economies remain longer to get back on their feet. This trend, combined with political and environmental changes, will accelerate over the coming decade, with positive and negative effects for insurance sectors. In emerging countries, insurers will certainly take the opportunity to reshape their products dedicated to local markets, while going global to build their technical expertise. Similarly, the insurance industry in western countries can still grow in their local bases (by exploiting socio-demographic and technological trends), and target, at the same time, the emerging countries.

Although no-one can predict exactly what will occur, and what will be the impact on different insurance sectors, a few trends are likely to become more important in the near future.

Customer expectations for transparency and speed of fulfillment are resulting from the increasing familiarity with the online world and the social networks.

Productivity gains and a better risk management are already obtained by automation and new technologies. That will go on, reinforced by the development of analytical techniques that can process larger and larger volumes of unstructured data. This will certainly conduct insurers to shift from a reactive claims payment model to a proactive loss control model.

With global climate change, insurers will have to be more and more sophisticated in their risk modeling, and more innovative in structuring risk sharing.

The rise of political and economic power of emerging countries could create different competitive dynamics. Insurers from West to East will have to navigate between two models: the globalization of the insurance value chain (standardized practices, harmonized regulations, world-class distribution), and greater protectionism by countries or regions.

In case of increasing globalization and automation, the ability to acquire and grow talent will be paramount, especially for people able to understand and function effectively in multiple cultures.