The ongoing digitization of the global economy and industrial practices is changing the nature of risk—disrupting the commercial insurance and reinsurance markets in unprecedented ways.
Organizations are increasingly relying on technology, automation, robotics, and remote-monitoring equipment to increase productivity and cut costs—a concept known as Industry 4.0. It is not just human failure that insurers must insure against; they must also now address unknown risks such as IT failures, cyberattacks, and data breaches.
As a vast amount of historical data is available to sources outside of the traditional insurance industry, both commercial insurers and reinsurers need to make clear sense of new and larger data analytics to better predict and price risk.
BCG can help commercial insurers and reinsurers differentiate themselves within a radically changing market. We combine our deep understanding of insurance underwriting, pricing, and risk with insight into the market and the technology forces disrupting various market sectors to help insurers:
For the first time in history, the once-stable reinsurance industry will split into four distinct strategic models. Only a few firms will retain a true knowledge edge. The bulk of the market will be forced to compete with alternative sources of capital to provide capacity.
To make the most meaningful business decisions, commercial insurers and reinsurers must know how to tap into large, complex streams of data and effectively apply advanced analytical techniques and algorithms across those streams. This process is known as smart analytics, and it can provide commercial insurers and reinsurers with critical new insights into behavior, probability, and risk.
BCG helps insurers understand how to most effectively use smart analytics by employing tools like our Smart Analytics Diagnostic Framework, which helps identify the right data pools and information gaps, devise and deploy a smart analytics strategy, and run complex and comprehensive analyses. In using such a tool, BCG can help insurers realize:
Though solid performance in the fast-growing North American market and in the UK has buoyed London, insurers must improve in emerging markets, reinsurance, workforce diversity, and innovation. The London Matters 2017 report provides fresh data.
Read the articleThe 300-year-old London Insurance Market confronts threats by globalization, the connected economy, and good, old-fashioned cost-based competition—all of which imperil its role as the preeminent, international hub, according to London Matters 2014.
Read the articleInga Beale, a former competitive rugby player and the first female CEO of Lloyd’s of London, talks about the future of the insurance market, her reverse mentor, and what it takes to propel a 330-year-old institution into the digital age.
Read the interviewBrexit. Companies’ insufficiently diverse workforces. Emerging markets. These topics raise many questions. Here’s how one expert answers them.
Read the interview
