For a long time, the insurance industry has led a sheltered existence. Due to tight regulation and strict solvency requirements in most markets, bankruptcies are rare. Currently, there are more than 10,000 insurers globally and when insurers do leave the market, it is mostly due to mergers and acquisitions. Even then, the brand often stays in place, including sales channels and back-end infrastructures, leaving the new, bigger insurer with a cumbersome legacy. Insurance has always tended to be a seller’s market; some deregulatory measures have increased competition somewhat, but overall, insurers seldom had to fear for their profits — and even less for their survival.
This comfortable situation is changing. In the recent past, a multitude of disruptive forces has altered the landscape: economic forces such as globalization and the financial crisis of 2008; technological forces which ubiquitously connect and inform individuals and organizations; and societal forces that include changing demographics and increasing democrat-ization worldwide. Their combined effect currently leaves many insurers struggling to grow or stay profitable.
Yet even in this environment, how are some insurers managing to stay ahead? What overall strategies do industry leaders follow? Are there strategic elements that distinguish the leaders from non-leaders? And how are they related to the type of market they operate in? To answer these questions and identify common elements of successful strategies, we interviewed senior executives from 80 insurers operating around the globe.
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About the authors
Global Insurance Leader, IBM Institute for Business Value, IBM Global Business Services
Dr. Andrea Cornelius
European Service Line Leader, Business Analytics and Optimization, IBM Global Business Services
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