The World Insurance Report 2019, published today by Capgemini
and Efma,
reveals that policyholders are increasingly concerned that their
insurance coverage has become insufficient for emerging risks such as
cybersecurity to environmental threats. Insurers are less ready for
change than their customers, most of whom want more comprehensive and
dynamic coverage. At the same time, a significant opportunity exists for
insurers to leverage technology and partnerships to get ahead of macro
trends and become more proactive partners to their customers.
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Key findings of the report include:
Insurers have been slow to respond to emerging risks
The report identifies five macro trends that are creating emerging risks
for insurance customers and their businesses: disruptive environmental
patterns, technological advancements, evolving social and demographic
trends, new medical and health concerns, and business environment
changes. Yet most insurers have been slow to respond to these trends and
equip customers for them. Under 25% of business customers across all
geographies, and less than 15% of personal policyholders, feel they have
sufficient coverage to insure against any one of the emerging risks
driven by these macro trends. Fewer than 40% of life and health insurers
said they have built a pipeline of new products to cover emerging risks
comprehensively.
There is a significant coverage gap in emerging risk areas
The slow response to emerging threats has created significant coverage
gaps for customers exposed to these risks. The report estimates that 83%
of personal insurance customers have medium or high exposure to
cyberattacks and to outliving their savings, yet just 3% and 5%
respectively are comprehensively covered against these eventualities.
Among business customers, 81% are exposed to escalating employee
healthcare costs against which just 17% are well covered; 87% are at
risk of cyberattacks with less than 18% comprehensively insured; and
almost 75% are threatened by rising natural catastrophes, for which just
22% are effectively covered.
Consumers are more prepared for change than providers
As the insurance landscape shifts, customers are showing greater
readiness for change than their insurance providers. Over half (55%) of
customers said they are ready to explore new insurance models, but
barely a quarter (26%) of insurers are investing in them. While 37% of
customers said they are highly willing to share additional data in
return for improved risk control and prevention services, only 27% of
insurers have the capability to tap real-time data for risk modelling
purposes.
Insurers need to innovate, and become partners and preventers
Insurers must respond to emerging threats, and changing customer
expectations, by embracing new technology and partnerships. Risk
assessment capabilities can be significantly enhanced through deployment
of machine learning, artificial intelligence and advanced analytics, and
effective collaboration with InsurTech providers. Progress in these
areas has been mixed: a majority (57%) have leveraged AI, machine
learning and advanced analytics, but only 29% have implemented automated
risk assessment, and just 20% real-time insight generation from IoT
devices.
According to the report, technological progress also needs to be matched
by a shift in attitudes. Where insurers have traditionally seen
themselves as a payer, they need to evolve into the parallel roles of
partner and preventer, working more closely with customers to mitigate
risks and provide on-demand services.
“Emerging risk trends and rising customer expectations are
dramatically changing the landscape for insurance, and providers must be
agile in how they respond,” said Anirban Bose, CEO of Capgemini’s
Financial Services Strategic Business Unit and member of the Group
Executive Board. “This research shows a coverage gap in areas of
emerging risk, but also highlights an important opportunity for
insurers. Those that can evolve their products through technology,
collaborate with innovators, and think of themselves as partners and
preventers to their customers, stand to benefit the most.”
“This research shows that the future for insurance will be
partnership-centric,” said Vincent Bastid, Secretary General of
Efma. “Insurance providers need to collaborate with partners who
offer high levels of expertise in areas from AI to advanced analytics.
Simultaneously, they must partner more closely with their customers to
provide the more responsive, demand-driven service many are seeking.”
Report methodology
The World Insurance Report (WIR) 2019 covers all the three broad
insurance segments―life, non-life, and health insurance. This year’s
report draws on research insights from two primary sources – the 2019
Global Insurance Voice of the Customer Survey and 2019 Global Insurance
Executive Interviews. Together, these sources cover insights from 28
markets: Australia, Belgium, Brazil, Canada, China, Finland, France,
Germany, Greece, Hong Kong, India, Italy, Japan, Mexico, the
Netherlands, Norway, Philippines, Poland, Portugal, Singapore, South
Africa, Spain, Sweden, Switzerland, Turkey, the United Arab Emirates,
the United Kingdom, and the United States. For more information, explore
the report website at www.worldinsurancereport.com.
About Capgemini
A global leader in consulting, technology services and digital
transformation, Capgemini is at the forefront of innovation to address
the entire breadth of clients’ opportunities in the evolving world of
cloud, digital and platforms. Building on its strong 50-year heritage
and deep industry-specific expertise, Capgemini enables organizations to
realize their business ambitions through an array of services from
strategy to operations. Capgemini is driven by the conviction that the
business value of technology comes from and through people. It is a
multicultural company of over 200,000 team members in more than 40
countries. The Group reported 2018 global revenues of EUR 13.2 billion.
Visit us at www.capgemini.com.
People matter, results count
About Efma
A global non-profit organization, established in 1971 by banks and
insurance companies, Efma facilitates networking between
decision-makers. It provides quality insights to help banks and
insurance companies make the right decisions to foster innovation and
drive their transformation. Over 3,300 brands in 130 countries are Efma
members.
Headquarters in Paris. Offices in London, Brussels, Andorra, Stockholm,
Bratislava, Dubai, Milan, Montreal, Istanbul, Beijing and Singapore.
Learn more www.efma.com.
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