This article is part of Carrier Management’s series on the Future of Insurance.
Q: What major changes do you see on the horizon for the property/casualty insurance industry in the next 10 years? What will insurance companies, insurance leaders, the industry and its workforce look like in the next decade? What risks will they insure?
Johnston (QBE NA): The power of technology to drive change and disrupt traditional industry models will continue to have a paradoxical effect on the industry. It will give us more tools to collect and analyze data to price certain risks, but it will also accelerate the pace of change and give rise to unknown risks. Who would have thought several years ago that a cyber event could potentially equal the losses from a major hurricane? Businesses will need help to manage these “unknown unknowns,” yet insurers will be challenged to assume risks that historical methods of calculating risk and return won’t reliably evaluate.
Insurers will need to continue to evolve the means and methods that they use to assess and assume risk at the same time the risks will continue to evolve, but I have faith that we will do just that. One hundred years ago, with the advent of mass production of the automobile and spread of in-home electricity, there was limited accessible data to support how these changes in the risk landscape would impact the industry—but the industry adapted. I am optimistic we can do the same today, but it will require thinking differently.
To match the pace of change, specialized teams will need to be more fluid, and nimbly assembling partnerships will allow companies to constantly adjust the optimal mix of technical experts and industry specialists tailored to the needs of each customer. The historical norm of outright ownership of all products and services will have to evolve to a more flexible approach to solution-based outcomes. As collaboration and skills-tracking technology improve, the options for assembling these teams will become less about location and more about having the right skills and experience for each client situation at a specific time…
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The industry’s historical orientation around product will need to evolve to a more solutions-based approach.
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