Introducing the Exponential Executive Program with Salim Ismail, David S. Rose

The Future of Insurance

Insurance Reimagined

The global insurance industry is facing an inflection point.
We aim to have this publication inspire business leaders and entrepreneurs in the insurance industry to reimagine the future of Insurance for sustainable and holistic impact creation, and usher in the desired transformational change.

This publication is a collaborative effort by Chander Nagpal, Clint Undseth, Lance Peppler, Magdalena Iordanova, and Thomas Anthony from the OpenExO community.

Contents

Executive Summary

Evolution of Insurance

Industry Preformance

The Shifting Sandbox – Ten Key Trends

Disruptive Thinking for the Disruptive Era – Exponential Organizations

Shifting Gears to Thrive – Nine Transformations and Evolution Initiatives

The Road Ahead

Executive Summary

We are in an era when our world is evolving at an increasingly accelerated pace. We are seeing radical shifts in demographics, consumer behaviors, global geopolitics, societal fabrics, and perhaps most significantly, wave upon wave of converging and rapidly progressing technological advancements.

The adage, “slow and steady wins the race,” is not pragmatic anymore.

No surprise, Agility, Adaptability, and Resilience are no longer mere buzzwords. They have become the essentials for organizations across sizes, geographies, and industries to stay relevant in the short term and, more importantly, thrive over the mid to long term.

The Insurance industry is no exception

As a protector of different risks, Insurance plays a critical role in socio-economic development, making it a strategic industry. And it’s not just strategic. It’s significant as well. It is one of the largest industries in the world.

In 2022, the global gross written premiums were an estimated $6.78 trillion, with the Property and Casualty business segment accounting for 60%.

While being large, the insurance industry is perceived to be slow, risk-averse, and, in fact, often described as “the coal industry minus the smokestacks.”

Given the industry’s fundamental role, strategic significance, and the apparent need for disruption and transformation, we at OpenExO* set out to dive deep into the arena.

Through this publication, we share insights drawn from insurance’s evolution over centuries, various changes currently taking place, and our perspectives on what we believe are the ten most critical shifts that offer both challenges and opportunities.

We present nine transformation and evolution initiatives and four vital strategic actions we believe the industry players (startups, scaleups, and incumbents alike) must take to ‘improve’ the current Core and, more importantly, ‘innovate’ at the Edges – To be future-ready and deliver holistic, sustainable growth and impact.

The ten critical shifts involve changes, some in the direct control of the insurers, others exogenous. Some are quite clear, others not. One thing is sure: they will all deeply affect the industry’s evolution and performance over the coming years.

  • Struggle to Generate Returns
  • End of Low-Interest Rates
  • Risk Landscape Getting Riskier
  • Evolving Regulations
  • Portfolio Sustainability
  • New Customer Persona
  • Protection Gap
  • Ever Increasing Competition
  • Emergence of Collaboration
  • Talent Relevance

Given these shifts,

We believe that insurance companies (incumbents, startups, and scaleups alike) must focus on nine transformation and evolution initiatives, some focused on building organizational capabilities (people, processes, technology), while others being specific business opportunities.

We strongly believe that executing these initiatives would enable the players in the insurance industry to address the headwinds, capture the tailwinds, and fuel the much-needed innovation.

  • Go Beyond Risk Transfer
  • Embrace Artificial Intelligence
  • Embed Blockchain for Efficiency
  • Products for the Audience of One
  • Launch Peer to Peer Insurance
  • Offer Pay as You Use
  • Build Integrated Healthcare
  • Become an Ecosystem Builder
  • Foster Experimentation

These insights and recommendations are based on 125+ years of combined experience of the team of authors involved in multiple transformation endeavors in the Insurance and other industries, conversations with several senior insurance business leaders, and performance analysis of the publicly listed insurance firms.

We hope this publication inspires business leaders at the incumbent insurers and entrepreneurs to embark on the much needed transformation journey – towards a competitive, sustainable, and reimagined insurance.

*OpenExO, established in 2014, is a global community of 33,000+ professionals leading and enabling exponential evolution and transformation journeys towards growth and impact for hundreds of startups, scaleups, and mid to large-sized incumbent organizations across industries and geographies.