McKinsey: insurance in 2030 will be very different
However, despite this, McKinsey does not view the negative fortunes of the industry to originate exclusively from the virus: “Even in the years before the pandemic, only a small subset of insurers were earning substantial profits, offset by another small subset of insurers that had destroyed substantial economic value.”
As such, the report postulates that, far from causing problems for insurance, the pandemic has merely highlighted the inefficiencies that were already present. In a belated ‘call to action’, insurers have subsequently been pursuing a course of digital transformation that McKinsey predicts will render the 2030 sector as markedly different from its predecessor.
Fulfilling the 2030 vision
First and foremost, the report estimates that an increased focus on digital technology will result in net operational gains, “Insurance carriers have an opportunity to improve productivity and reduce operational expenses by up to 40% while simultaneously improving their customers’ experience.”
Furthermore, core aspects of insurance will be different:
- Products: increasingly sophisticated tech platforms will enable simplified products to reduce customer confusion. Portfolios will also be drastically scaled back; McKinsey estimates between five and 10 products per insurer (a 90% reduction on today’s market).
- Distribution: a seamless and effective omnichannel approach will become the norm, with customers switching between online, automated and human agents to further their enquiry. Sales processes will also be refined to enable better lead generation.
- Underwriting: although McKinsey doesn’t expect underwriting to be fully automated in 10 years, it is still true that large portions of it (30 to 40%) is occupied with repetitive, admin-related tasks. Therefore, investment in is likely to continue.
- Claims: following on from underwriting, the report does speculate that claims will benefit significantly from automation; human and artificial intelligence (AI) will combine to expedite claims without sacrificing human empathy.
In summary, the report characterises the transition as the industry moving towards ‘tech companies that provide insurance’, rather than the inverse. It also stresses that gaining employee buy-in will be crucial in terms of a successful departure from old paradigms.
“Insurers need to communicate and effectively, starting with a united front at the top,” McKinsey concludes.
“Employees are happier and more apt to change their behavior when leadership communicates a clear view of where the company is going. The CEO and other board members need to recognise and communicate that the transformation is a journey and the reasons the transformation is necessary in this new and volatile environment.”
The Ultimate FinTech & InsurTech LIVE Event
From October 12th-14th, 2021, BizClik’s FinTech & InsurTech event will bring together influential executives from around the world. Streamed live from Tobacco Dock, London, this three-day event will be an excellent way to finish the year strong, gaining the confidence your company needs to move forward into the future.
With keynote addresses from global leaders, dynamic roundtable discussions, and extensive networking opportunities, FinTech & InsurTech 2021 will expand your network, deliver insight, and enhance your organisation’s reach.
Already confirmed speakers include Colin Payne, VP & NextGen FS Global Lead at Capgemini; Dipu KV, President and Head of Operations & CX at Bajaj Allianz General Insurance Company; Bryan Caroll, CEO at TNEX; and Lucy Demery, Managing Director at Barclays.
The event will include:
- Keynote addresses from respected industry leaders
- Dynamic live roundtables (inc. Q&A)
- Fireside discussions
- Inspirational Speakers & Presentations
- Extensive networking opportunities
Meet the Speakers
Each week, from now until the event, we’ll be announcing the latest speakers who are set to grace our physical or virtual stage, prepared to share their knowledge and insight with attendees.
Our second batch consists of:
Currently the Senior Vice President of Business Development & Fintech for Mastercard UK & Ireland, a position he’s held since 2014, Abraham describes himself as “a proven and successful senior sales leader with experience across a wide range of industries, sectors, and channels.”
Graduating from the University of Northampton in 1994 with a BA in Economics and Law, he worked for nine years at Sainsburys - eventually responsible for banking the company’s revenue and running its ATMs - and then Barclaycard for three years as Head of Client Management. In 2007, Abraham became VP of Client Management at American Express, and then VP and GM Global Supplier Relations EMEA in 2012.
In his current role at Mastercard, Abraham is accountable for the acceptance of all payments and products through all channels, devices, and technologies across UK and Ireland. In addition, he oversees the deployment of innovative new payment tech within the region.
Fraser-Hawkins’ role as CEO, UK Corporate, at Marsh McLennan is the continuation of a long and successful insurance career, which has included being London Sales Director for JLT Group and Branch Director for Willis Towers Watson.
Marsh prides itself on being a company that hires top-tier talent, does work that impacts peoples’ lives, and offers its employees the opportunity to make a difference. This is clearly an attitude that aligns with Fraser-Hawkins’ own values; regarding the insurer’s UK Young Professionals initiative, a support network to help young professionals in their development, he said:
"I am passionate about developing talent and our Young Professional CRG provides a brilliant community for our Young Professional colleagues to discuss key issues relevant early in their careers, as well as an environment to promote the skills, learning and network for success."
Massaro is currently the CEO of Boston fintech Flywire, a role he took on in 2013. He first joined the team in 2012 as VP of Business Development, but it wasn’t long before his entrepreneurial skills were redirected to leading the entire company’s high-growth strategy worldwide.
An expert in domestic and international payments and billing, enterprise technology sales, strategic alliances, enterprise software, SaaS, product management and marketing, and much more, Massaro is a consummate finance professional whose credentials befit the leadership of a prominent global payments fintech.
His previous positions include Consultant at PwC and Product Line Manager at Oracle, and he maintains a Mentor role at startup accelerator MassChallenge. He graduated magna cum laude from Babson College with a BS in Information Systems and Finance.
This event is set to be one of the year's most unmissable. If you want to get leading perspectives on the future of fintech and insurtech, go to Eventbrite and purchase your tickets now.