In an interview with the DIA last month, McKinsey’s Jörg Mußhoff painted an optimistic picture of the insurance industry's digital transformation journey. Building on this discussion, we sat down with Simon Kaesler, Partner at McKinsey, to talk about emerging digital models and the road ahead.
Simon Kaesler is a Partner at McKinsey & Company. He leads all digital insurance distribution activities in Europe, including insurtech. His areas of expertise include buildup of digital attackers, distribution transformations, omni-channel and multi-access, advanced analytics, customer experience and sales force effectiveness programs. McKinsey is a Knowledge Partner of DIA. Simon Kaesler was one of the thought leaders who shared his vision at the 2018 edition of DIA Munich. Expect a similar level of keynote speakers at the upcoming DIA edition. Just click on the banner below to find out more.
We see so many insurtechs on stage at DIA, all of them with their own distinct products and business models coupled with much innovation. What do you make of this growing Insurtech landscape?
Simon: “It’s been exciting to follow the development over the years. Since 2012, over $10 billion has been invested in insurtech – a sizeable figure. But beyond the sheer magnitude of these investments, we've observed three main trends: diversification, professionalization, and collaboration. Diversification highlights that insurtechs no longer focus only on P&C and distribution (as is was often the case in the beginning), but are rather creating digital solutions along the entire business value chain and across all lines of business. This means there are many more areas where digital technologies are playing a role.
The second trend, professionalization, is something that accompanies maturity. To survive in the highly complex and regulated insurance market, insurtechs must prove they've done their homework. Innovation needs movers and shakers, but it also needs patience and a solid go-to-market strategy.
Which is a good transition to point three: collaboration. While insurtechs began as "digital attackers", seeking to disrupt the traditional insurance industry, insurtechs are now realizing that to survive, they must collaborate. Currently, less than 10% of insurtechs seek to disrupt the entire insurance business model, and almost 2/3 focus on certain parts of the value chain and want to meaningfully integrate with established insurers. The question is no longer 'insurtech vs. traditional insurer' – but how they can best work together to create real value for the customer.
Want to continue reading?
Sign up for our newsletter to read the full article and receive the latest news about innovation in insurance and Insurtech straight to your mailbox every week. Already signed up before?
- Join over 20,000 other insurance executives to receive the latest innovations in insurance
- Be the first to read our Insurtech editorials
- Stay tuned for the latest community news
- Get access to exclusive offers!