Life insurance will gain an uplift from growing populations and the reduced ability of the state to provide welfare. Customers are likely to seek more bespoke products, reflecting the power of new technology to map individual behaviors and preferences. Risks are changing in a number of areas, one being the development of cyber as an insurance peril. Autonomous vehicles are another area of change for the insurance industry. Big data is helping to price risk more accurately while insurtech is transforming distribution and customer engagement. Companies need to embrace insurtech to avoid being overtaken by startups.
Company specific thoughts:
Beazley's cyber insurance business is a move in the right direction, while insurers such as Swiss Re and Munich Re are making investments in new technologies and working with insurtech partners who will help to position them for the future. In personal lines, autonomous vehicles present motor insurers with the possibility of significant industry change. Large pension writers, retail asset managers and wealth managers are likely to benefit from the rise in life expectancy and the need for longer-term financial planning. Advice and products will increasingly be sought online as customers move away from traditional face-to-face interactions.
Financials: Up close
The future will be determined by those who are willing to reinvest, adapt and turn future threats into opportunities.