A significant portion of the global motor insurance market—valued at $200 billion—is at risk, according to a new joint report from BCG and Morgan Stanley. The impact could come from the cumulative effects of several fast-approaching, disruptive trends, including innovative car technology, new alternative mobility, data growth and digitization, new regulations, and overall world economics.
The report, based on interviews with 45 senior insurance executives, OEMs, and technology providers, as well as a global survey of drivers and motor insurance customers in 11 countries, warns, among other key findings, that insurers need to prepare themselves for the following realities:
The report concludes that the next several years will be crucial for insurers. Many insurers are operating under the assumption that disruptive change still lies far in the future. However, to continue business as usual or even to engage in incremental change would be a potentially fatal misstep.
Insurers must lay the foundations for long-term success now by fundamentally reorganizing and digitizing their business to put the customer’s data at the center of everything for improved transparency and data sharing across all functions—and by diversifying their product offerings and pursuing new partnerships to increase their value proposition and revenue opportunities.