"Commercial insurance executives recognize the benefits of digital but face several obstacles in making headway. Large incumbents lag behind because the complicated nature of underwriting and claims often requires human judgment and interaction, transactions are sometimes low volume and bespoke in nature, and legacy IT systems and processes make the transition resource intensive and complex. What’s more, commercial insurance has historically been slow to change, and a lack of companies with clearly demonstrated impact from digital has left many executives focused on their own plan of action."
Mckinsey & Company October 2018
This paper highlights key tasks and activities for similar success.
- Understand relevant insurtechs
- Engage with them
- Act with them
This will lead to three key areas of transformation
- Current value chain- reduce admin costs by X%
- Extend current value chain- increase revenue Y%
- Explore new risk pools and business- Z% future revenues
Above all the authors urge haste and action.
Digital core insurance capabilities. By adopting new technologies, insurtechs in commercial lines are at the forefront of reducing manual touch and enhancing human judgment in key insurance processes, such as underwriting and claims. The increased dependence on technology lowers costs and allows insurers to adjust their approach from “art” to “science” in key disciplines, including underwriting, risk selection, and claims leakage prevention.