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Short insights on topics that matter to leaders in the global insurance industry.

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Why insurers should embrace remote work

In a recent McKinsey Global Institute analysis of the potential for long-term remote work, highly skilled and highly educated workers in a handful of industries were found be able to work remotely three or more days a week just as effectively as working from an office. One of the industries with the highest potential for this setup? Insurance. According to the research, which analyzed more than 2,000 activities in more than 800 occupations, three-quarters of the time spent on activities in ...

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Will your insurance IT investments pay off?

Automated claims processing, price comparison platforms, mobile bill paying—these are just some of the digital services that insurance customers expect and insurers want to provide. As the demand for digital skyrockets, so does the need for insurers to invest in IT. In the past seven years, the share of IT in total operating costs of property-and-casualty (P&C) insurers increased 221 percent. The rise of digital means technology is no longer a cost center. Rather, it is an asset that, ...

Catch up on the best insurance insights: Top seven articles of 2020

The most-read and shared articles from McKinsey’s Insurance Practice in 2020 shed light on the status of long-standing industry trends, effective responses to the effects of the COVID-19 pandemic, and more. Ecosystems and platforms: How insurers can turn vision into reality As traditional industry borders fall away, ecosystems—and the digital platforms that often enable them—will greatly influence the future of insurers. Today, insurers win by offering a product. Tomorrow, ...

The future of insurance agent-customer interaction

The pandemic has made digital engagement between insurance agents and their customers the default. In this infographic, we examine research from China that reveals how the pandemic-induced shift has actually resulted in more frequent—and more efficient—interactions. Download the infographic

Navigating the next decade of US insurance claims

The insurance landscape will change dramatically over the next five to ten years, accelerating the rate of change we have seen over the past decade, thanks to two primary trends: evolving customer expectations and accelerating technology evolution. By 2030, millennials and post-millennials will make up nearly half of the adult population in the United States.1 These digital natives will expect seamless, omnichannel, real-time interactions integrated with the platforms they already use ...

Behavioral science in insurance—nudges improve decision making

It’s a common problem: we know what’s good for us, but we don’t always do it. (How many people really use their gym membership?) This kind of counterintuitive behavior is often due to poor “choice architecture”—the context in which people make decisions. Choice architecture involves the medium and sequence in which information is presented, how our actions compare with those of our peers, and so forth. Poor choice architecture can foster unfavorable behaviors, ...

Italian insurance: Achieving scale in advanced analytics

Before the COVID-19 pandemic, the McKinsey Global Institute estimated that artificial intelligence and advanced analytics (AA)1 could create $1.1 trillion in value for the insurance industry, representing almost 17 percent of the industry’s current total global revenues. The importance of AA is likely to increase in the postcrisis environment. Indeed, many people expect to use digital services more in the aftermath of COVID-19, and businesses such as banks will demand more advanced ...

Industrializing data and analytics among Asian insurers

In recent years, Asian insurers have increasingly turned to data and analytics tools to drive growth and improve operational efficiency. Many have already invested in starting up analytics teams or setting up insurtech partnerships to launch pilots. To date, some of the most popular use cases revolve around increasing new business by suggesting the next product to buy, improving claim-fraud detection, and increasing the straight-through processing rate of new life insurance policies ...

How Asian insurers can build a digitally enabled hybrid distribution model

The COVID-19 outbreak is disrupting the insurance distribution model. The agency channel in particular is under pressure, as face-to-face meetings between agents and customers are not possible for the foreseeable future. While countries are beginning to loosen physical distancing requirements, the pandemic’s effects on the insurance distribution model are likely to last. Specifically, the outbreak has accelerated movement toward a digitally enabled hybrid model of distribution, in which ...

Infusing tech talent into the UK insurance industry

A landmark report from the McKinsey Global Institute warned that demand for workers with technology skills would rise by 55 percent from 2016 to 2030 (PDF). In the insurance industry, the growth in demand has already had an impact on back-office roles, especially contact centers. The need for employees with technology skills will only increase in these and other functions, including claims and actuarial roles, frontline sales, and underwriting. While insurance leaders have accepted the ...

Charitable giving in the US insurance industry

McKinsey’s Insurance Practice has partnered with the Insurance Industry Charitable Foundation to assess the state of charitable giving in the American insurance industry. A follow-up to the foundation’s previous work in 2011 and 2015, the goal of this research was to identify trends in charitable giving and to highlight opportunities for the industry to achieve greater impact through giving. In 2019, the survey was expanded to include responses from life insurance and ...

Ecosystems in insurance: The next frontier for enhancing productivity

Insurers have a productivity challenge. Recent McKinsey research found the insurance industry has struggled for years to achieve productivity gains at scale, particularly compared with other industries. In addition, the spread in operating costs between the highest and lowest performers in both P&C and life has substantially increased over the past decade. While four categories of levers—functional excellence, structural simplification, busi­ness transformation, and enterprise ...

Catch up on the best insights: Top five insurance articles on McKinsey.com

The five most-read insurance articles of 2019 include perspectives on the future of claims and underwriting, the digital transformation of the bancassurance channel, and how insurers can benefit from the Internet of Things. From art to science: The future of underwriting in commercial P&C insurance Underwriting is essential to performance excellence. Today’s insurance carriers must evolve their role to meet the industry and customer needs of tomorrow. What do leading players have in ...

A view from the Pacific Insurance Conference: How to create a successful insurance ecosystem

The Pacific Insurance Conference in Hong Kong is one of the most important events in the Asian insurance industry calendar, and the 29th edition saw more than 300 insurance executives gather to debate, discuss, and explore the industry’s future. One of the hottest topics was the rise of ecosystems. This trend is driven by changing customer expectations and technology innovations, and it is impacting many industries. Insurance is no exception (Exhibit 1). To understand the importance of a ...

Renewing the life insurance proposition in a low interest rate environment

After nearly half a decade of ten-year Bund yields below 1 percent, and about six months of negative ten-year yields across most of continental Europe, the expectation of continued extremely low interest rates poses major challenges for life insurance companies in Europe and—to varying extents—around the world. The impact will be multifold: financial revenues will decline across products, the capital requirements of guarantees will skyrocket, and the value proposition of life ...