Rewriting the insurance market
Principal Analyst Ellen Carney discusses the societal, consumer, and technology changes that are rewriting the insurance market — and provides guidance for insurers in this new world.
Insurance advertising tells us that insurance is a vibrant and hotly contested market. It also appears as though claim response anchors the relationship between the insurer and the customer, but that masks some realities:
- Fifty-two percent of US insurance customers between the ages of 25–44 plan on changing insurance companies in the near future.
- An individual consumer rarely makes a claim, so it remains the minority experience and yet continues to be a key selling point.
- The primary relationship continues to be with the agent, leaving the insurer itself as a commodity that can be easily replaced.
And maybe the most striking reality is that consumer behavior and the role of digital are reshaping the fundamentals of insurance. For example, automotive insurance is moving from annual policies mostly rooted in car ownership to on-demand insurance based on the specific risk attributes of each mobility moment, meaning the customer selects different policies and carriers on a per-trip basis.
This dynamic is also flowing into home insurance, where spot-market insurance is already available to support flash flooding as we see more and more violent storm systems across the globe.
In this episode, Ellen Carney makes sense of extraordinary market change as insurers jostle to win in a churn-heavy market.