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Navigating in an increasingly VUCA (Volatile, Uncertain, Complex and Ambiguous) world requires a new approach for the property and casualty insurance sector. Supporting insurance companies on their digitalization journeys, I’ve found that their challenges mainly revolve around the same questions.

What are the most important strategic priorities within insurance for 2024 and beyond? Naturally, there will be nuances and different answers to this question, depending on companies and regions, but below are some key themes that should be relevant to every insurer:

How can insurers build macro-resilience in the face of geopolitical risk and economic uncertainty?

Amid turbulent times, it’s even more paramount than usual to stay focused on balancing risk and reward. While it’s easier to immediately emphasize costs and risks during tougher periods, it’s also about positioning yourself for the future. We often see operational resilience taking precedence in today’s uncertain landscape, where insurers are going back to core principles of insurance such as more sophisticated underwriting and pricing, and putting measures to strengthen it. Customer experience is still high on the agenda, as is finding a balance when it comes to right-shoring of employees, empowered by new technologies such as RPA and Gen AI.

How can insurers innovate to mitigate evolving risks?

75 percent of risks – from natural catastrophes and climate change to aging populations and cybercrime – remain uninsured, according to Swiss Re Group, one of the world’s leading insurance companies. How can insurers contribute to building a more resilient world? Part of the answer would be, as referred to above, a shift “from art to science” in underwriting, where pricing will be an important theme. While looking at price to seize market opportunities and manage risk, e,g, avoiding anti-selection, is the bread and butter of insurance, remaining focused on both sides of the risk-reward equation remains key.

It’s also important to continue the journey from “detect and repair” to “predict and prevent”, where the insurer becomes more of a provider of certainty of well-being. This typically requires utilizing new technology and new product offerings with smart IoT devices and predictive analytics at the center. How closely customers want to be “under surveillance” and “trading privacy” in return for better predictions and pricing is, and will remain, a hot topic

Navigating a new era in personal data: where do the opportunities and risks lie?

Driven by major technological development, not the least in Gen AI, there are significant opportunities ahead, evolving around increased personalization and thereby more personal relevance and better coverage of risks. In parallel, new risks emerge where personal data will be under scrutiny, e.g. with regard to AI regulation. Everything around legislation, compliance and consumer permission will have to be handled with care. Also, note that personalization may lead to customers with riskier profiles being priced out of affordable insurance which is a topic of societal importance.

Working with customers in pursuit of sustainability targets: what more can insurers do?

They can do lots of things. My advice is to focus on prevention, working towards data sharing where possible, and influence regulation. Insurers can also help encourage sustainability goals through pricing incentives linked to sustainability actions by end users/clients – like installing water leak detectors, flood defenses, solar panels, electric cars, etc. They can also stimulate the “right behavior” on the corporate side, where insurance pricing could be affected by ESG measures linked to flooding, storms, placement of factories, etc.

Is there a common thread to strengthening competitiveness then? Yes, the above is nearly impossible without the modernization of tech platforms, for both internal and external reasons, where quality data, the very bloodstream of any future-resistant insurance company, is allowed to flow across the company.

Learn more by visiting our insurance section of the web.

Philip Wegloop

Associate Director, BFSI, Cognizant Consulting Nordics

Philip Wegloop

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