Futurist Keynote Speaker: Posts, Slides, Videos -
Future of Insurance Industry / Risk - Keynotes
* Patrick Dixon has advised many of the world's largest insurance companies on global trends, opportunities, customer behaviour, fund management strategies and risk management. Extract from his latest book: The Future of Almost Everything....
Insurance is as fundamental to a stable
and prosperous society as banking, hospitals and schools. Yet more than 3
billion people have never heard of insurance, do not know how it works, and
have no idea how to get hold of it. Most insurance today is sold to a mere 1% of the global population who own 50% of all the wealth.
Expect rapid growth, therefore, of basic
insurance in emerging markets, where 85% of humanity lives, targeted mainly at the emerging middle class.
Health insurance will lead the way, after insurance types that people are
forced by law to buy, such as motor insurance. Expect a boost in many nations
in sales of life or health products from tax rebates, especially where they are
structured to contain an element of saving. Many who are unbanked today will
gain their first insurance cover using a smartphone, or through micro-loans
associations.
EU retail insurance dominated by home
and motor
Most insurance sales in the EU will
continue to be cover for homes or vehicles, with travel and life insurance
following behind. Expect savage online competition from so-called aggregator
sites that display competing quotes for the same risks from up to 200 different
companies.
These sites are already seizing over 40%
of the general insurance market in countries like the UK and we can expect a
similar pattern in many other developed nations by 2020. Insurers will be able
to win sales without offering the lowest price, but only by persuading
customers of the value of a ‘favoured’ brand, to pay out when there is trouble,
to handle a claim rapidly and sensitively.
Price comparison means fines for loyalty
Aggregators will provide a very precise
mathematical tool for marketers to measure their own brand value. If the
cheapest quote from an unknown company is $150, but the customer selects the
third one down the list, which is a well-known brand offering a price of $230,
then we know that the ‘added’ value of the brand to that person is $80.
European insurance companies often offer
very low prices for new customers, making their profits in the following years
by increasing prices for their loyal customers. Expect growing numbers of
customers to switch companies every year – to whichever insurance company is
the most willing to throw money away with such unsustainably low pricing.
Why many insurers will detach from banks
Many banks experimented a decade ago
with their own insurance companies, hoping to ‘cross-sell’ insurance products
to existing customers, but in most cases the results were disappointing. Most
insurers will remain independent of banks, with partnerships and syndicates but
all held at arms’ length. This is even more likely in future with different and
complex regulatory requirements for each.
Re-insurance will be a vital part of the
future of all large insurers, backed by huge corporations like SwissRe and
MunichRe. These companies will be taking views on every trend and Wild Card in
this book (see pxxx), how they interact, what it all means for, say, business
disruptions over the next decade in a particular industry, or for the risks of
New Orleans being hit by another huge hurricane, or Russia invading Kazakhstan.
Related news items:
Older news items:
Thanks for promoting with Facebook LIKE or Tweet. Really interested to read your views. Post below.