McKinsey: three priorities for modernising life insurance
McKinsey & Co has released a new report exploring the ways in which life insurance can meet the challenges of a rapidly transforming sector
McKinsey & Co has released a new report exploring the ways in which life insurance can meet the challenges of a rapidly transforming sector
McKinsey & Co has released a new report exploring the ways in which life insurance can meet the challenges of a rapidly transforming sector.
Stating that this specific aspect of the industry has suffered from poor growth and profitability in recent years, the company points out market swings (particularly the growth seen in Asia) and the advancement of data analytics and artificial intelligence (AI) as destabilising factors.
Furthermore, global penetration has fallen by 3% over the last 10 years, and the COVID-19 pandemic has led to a depression in global interest rates, which has had an aggravated effect on the deterioration of life insurance stock.
However, McKinsey believes that a three-point roadmap for improvement could see life insurance revitalised for the post-COVID-19 era:
Personalising the customer experience
Instead, the report advocates policies that incentivise healthy living and mental wellbeing, such as those pioneered by Vitality (FinTech Magazine’s profile of Vitality will appear in its new edition released in October).
Developing flexible product solutions
Reinvent skills and capabilities
In many ways, McKinsey’s report is reminiscent of Swiss Re’s clarion call to the industry in August: life insurance can be a strong force for support and stability in an uncertain world. Modernising established practices is the linchpin of achieving this potential.