When documents are stored on computers linked to the Web, there is no need to rummage through filing cabinets. A little hacking will do. As a result, intelligence agencies need fewer exploding cigars and more mainframe capacity. Unlikely as the comparison may seem, the insurance industry is undergoing the same transformation.
Telematics is but one example. Customers’ activities are increasingly recorded electronically: what we buy from whom, where we dine out, whether we pay our debts, where we are interested in going on holiday. If today’s insurers are to thrive in the new world of abundant information and hands-off transactions, they will need to be reborn. They must transform into the very information companies that threaten to supersede them.
New Business Scored Loss Ratio
Our data suggests insurers who cannot adapt their models fast enough could lose out by as much as four percentage points of margin per year.
Like intelligence agencies, insurers need fewer James Bonds and more computer nerds
By Arthur White, a partner in Oliver Wyman’s Insurance practiceDOWNLOAD PDF