Transformation in Insurance

Abstract

The international insurance sector has navigated the global financial crisis in a much easier way vis a vis the banking one. More limited restructuring and liquidation activities were required to ensure its survival. However, within the global financial system, it now looks to be the most impacted one—as the technological innovations and the related digital disruptions are posing an unprecedented number of competitive threats. The level of discontinuities expected in the insurance sector suggests how the transformation challenge (and related risk) for insurance companies could be the highest in the system, and requiring an even more radical re-thinking of their business and operating model. Their “synapses” opens up a number of opportunities as well, as the new data and intelligence available and the new interconnection plays could allow not just to create value for multiple stakeholders, but also address the very “old” risks being underwritten—dramatically reducing or eliminating some of them. The question is then whether insurance companies have a better chance than FinTech to do that and how they can justify and secure a fair share of profits on arising new risks.