Even before COVID-19, the property/casualty insurance industry was making the move toward digital in distribution as well as other areas of the business, such as claims and pricing. Ecosystems in particular are a part of insurers’ strategic plans—but they are rapidly shifting from vision to reality as their necessity increases. Indeed, ecosystem-centric operating models will only become more important in insurance in the coming years as traditional geographic borders fall away and more customers, agents and insurers rely on digital channels to conduct business—especially in the absence of in-person meetings.

Executive Summary

Ecosystem-centric operating models will become more important in insurance in the coming years as traditional geographic borders fall away and more customers, agents and insurers rely on digital channels to conduct business—especially in the absence of in-person meetings. McKinsey & Company Partner Erwann Michel-Kerjan advises on ways in which P/C insurers can prepare, including reskilling their talent, defining customer value propositions, investing in tech architecture to connect through APIs and figuring out how to extract more value from their data.

However, insurers will need to decide how willing they are to enter and compete in these new operating models, since it will mean interacting with customers and other organizations in new ways. With some of those adjustments come innovative opportunities to serve customers. As ecosystems connect products and services and break down boundaries, access to data can help insurers move from risk insurance to risk prevention.

Altogether, ecosystems can help P/C insurers stay relevant, expand their customer bases and explore new opportunities. But to participate strategically, they need to focus on protecting their existing customer relationships, considering their capital allocation, developing new technology and capturing value from that data.

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