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July 01 2019 | Mark Breading

There is little doubt that the P&C insurance industry is transforming. The so-called disruption touted by InsurTechs and others has not hit full force, but there is a coming tsunami of change that will be driven by outside forces. Technologies such as AI/machine learning and the Internet of Things are already prominent in insurer strategies and projects. The demographics of the insurance workforce are shifting and will drive many changes over the next decade. New technologies in the digital, connected world promise to change the risk landscape – in some cases dramatically reducing risk and in others introducing new ones. There is much experimentation with products today, addressing the sharing economy and on-demand, episodic, and parametric types of coverages.

Insurance 2030 blog updatedThis raises questions in many senior executives’ minds about the nature of the insurance business in the future. Will change really be dramatic, or is it overhyped? How will it affect the lines and segments of an individual company? Lacking a crystal ball, it is very useful to employ a scenario planning approach, developing and evaluating several possible future scenarios in the context of a specific insurer’s business. While some may view this as an academic, blue-sky exercise, it typically yields surprising insights that serve to inform short-term and mid-term strategies.

Naturally, these types of initiatives should not be done in a vacuum. A realistic assessment of the current state of the company is a good starting point: the products, people, processes, technology, and other dimensions of the existing model. The intent is not to scrap existing strategies and plans, but to layer in new strategies over time that position for the future. Ultimately, every insurer needs to build and execute along their transformation journey or fine-tune and enhance their journey plans based on new insights.

What will insurance look like in 2030? We humans have proven to be bad at predicting the future. However, in an era of rapid change, successful companies are those that create a culture and an infrastructure that is adaptable, enabling them to seize new opportunities as the world changes.

For more information on scenario planning and the development of digital transformation plans for insurance, read the recent SMA research report, Insurance 2030: How Technology is Transforming the P&C Landscape.


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To learn more, please contact:
Mark Breading
Partner
Strategy Meets Action
614.562.8310