Big data and technological advances enable insurers to know more about their customers and the risks they have to underwrite. Cyber risk and autonomous vehicles are among the latest challenges that require new interpretations of risk and responsibility, while climate change is an area where insurers have excelled by developing risk models and influencing land use and building code policies. Change is usually seen as an opportunity for insurers because it gives rise to new risks and therefore product opportunities. Insurance will become progressively more digitized and automated as insurers gather and then analyze larger pools of data.
Company specific thoughts:
Companies such as AON and MMC have positioned themselves as frontrunners in cyber security, autonomous vehicles, and environmental matters. CB and TRV have taken a lead in data and analytics and have invested in insurtech, and they have both engaged with legislators and regulators to discuss autonomous vehicles, cyber liability, climate change, and workplace protection.
Some companies, including AIG, have invested in internet-of-things monitoring and predictive and prescriptive analytics, which promotes preventative insurance rather than simply claims-focused insurance. Although slower to adopt technology than banking and other sectors, insurance is beginning to catch up. Life insurance remains comparatively unchanged, but companies such as LNC and PFG are conspicuous for digital and product strategies that keep pace with consumer needs and buying patterns.
Financials: Up close
The future will be determined by those who are willing to reinvest, adapt and turn future threats into opportunities.