Peter Manchester, Global Insurance Advisory Leader and EMEIA Insurance Leader, EY

Industry View from


How disruptive forces are shaping the next wave of the insurance sector

The insurance sector is facing significant waves of disruption. Important decisions about market positioning, ecosystem relationships, technology investment and skills requirements need to be taken.


Key drivers of change include the evolving nature of risk and liabilities. Advances in technology are also opening up new ways of doing business. In addition, customers increasingly look for simple, intuitive and frictionless interactions with insurers when buying policies and making claims.


Technology is key to helping insurance companies not only respond, but also take forward-looking strategic decisions about their business models. By investing in technology, insurers can give personal lines, customers and SMEs the automated, straight-through, low-touch digital experience they seek. For more complex commercial lines, technology will be required to support individual underwriting and global risk-transfer mechanisms. Insurance firms need to adopt a “digital-first” mindset – understanding what their customers demand and then designing a digital solution.


Insurers are already feeling the benefits of past investments in robotic process automation and digital assistance chatbots. Cloud-based technologies or blockchain could bring new future benefits, and a number of use cases have been developed. At EY, we’ve invested in creating Insurwave, a blockchain platform which can be used to establish smart contracts.


Future developments could transform the insurance sector. If blockchain and other technologies provide real-time exposure data to all parties, the annual cycle of today’s marketplace could be replaced by continuous contracts. Underwriters could use the availability of mass data to develop more granular and bespoke underwriting capability. The development of smart contracts with embedded controls and pricing could create a more seamless experience for all parties – increasing effectiveness, while reducing costs.


There is no one-size-fits-all solution for insurers when responding to the disruptive forces of today and tomorrow, and embracing digitization. However, for many insurers, creating a “smart claims” function offers significant benefits and must be a priority. Data and technology can be used to reimagine the claims process – up to perhaps 60 per cent of claims could be handled digitally. For other more complex claims, artificial intelligence and digital dashboards could help claims handlers make faster decisions.


Achieving such change will require substantial financial investment and human resources. Insurers face challenges in accessing the skills and capabilities needed for new operating models and more automated processes. In claims functions, for example, some roles will require a greater number of highly skilled individuals with stronger analytical ability.


Looking ahead five or 10 years, further consolidation could create a more segmented insurance market with larger players. We could see the development of global ecosystems grouped around broad sectors such as retail, travel, mobility, health and wellbeing, where insurers work together with other entities to create more integrated services and products that bring them even closer to their customers.


Change is certainly coming. Insurers have the opportunity to build competitive advantage by anticipating future disruption and the opportunities that accompany it – using technology in combination with human capabilities to develop customer-focused, efficient and effective operations.

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*Disclaimer: The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organisation or its member firms.

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