Digital by Default: Transforming Insurance

Next week, I’ll be attending DigIn 2019 with hundreds of my colleagues across insurance carriers, solutions providers, insurtechs, investors, and others for exciting discussions about digitization and its impact on insurance. It’s no secret: the seismic shift facing our industry is changing it forever—and for the better. Yet, despite widespread recognition of this transition, few insurers have successfully developed or executed on a comprehensive digital strategy.

Competitive landscapes are changing fast. As such, it can be difficult to know exactly how digital technology will play out—and where to place bets. In addition, carriers and others have pointed to certain impediments to successful development of a comprehensive digital strategy, including the following:

• Regulations curbing the ability to experiment
• High barriers to entry—and the resulting limited competition—leading to less experimentation
• The culture of insurance discouraging risks rather than embracing them
• Tactical or incremental initiatives seeking only modest performance improvement
• A lack of competitive performance analysis, even as the field of insurtechs surges

Despite these headwinds—and in fact because some players are finding ways around them—competition is heating up quickly. Speed is critical, as first movers are going to be the winners. To win in the digital world, insurers must make changes to their corporate models and modes of operation.

During DigIn 2019, McKinsey Associate Partner @Meghan Lodolo and I will be leading a breakout, during which we will discuss the following key shifts that insurers must make:

• From gaining market share to gaining dominance
• From focusing on regulators and intermediaries to focusing on customer value
• From having an inside-out view of your business to hacking your business from the outside-in
• From planning annually to being a first mover, utilizing agile testing and learning

In all cases, success requires unquestionable commitment to a “digital by default” strategy from the top, even if it is initially uncomfortable.

I’m very much looking forward to connecting at DigIn and discussing the many fascinating developments in the world of digital insurance.