| This week, how tech is transforming the insurance industry. Plus, China’s domestic tourism market is soaring, and how companies can address the “great attrition.” |
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| Policy change. This is not your grandparents’ insurance industry. Today, insurance is on the verge of a seismic, tech-driven shift as AI and its related technologies lay claim (pun intended) to everything from distribution to underwriting. Advanced technologies and data are already affecting policies—in close to real time—as they are priced, purchased, and bound. |
| Adjustments on the fly. In McKinsey’s Insurance 2030 report, we imagined a customer in that not-too-distant year whose drive to a meeting across town starts with a digital personal assistant mapping a potential route and sharing it with his mobility insurer. The insurer comes back with another route that has a much lower likelihood of accidents, along with a calculated adjustment to his monthly premium. This digital assistant also alerts him to changes to his life insurance policy, which is now priced on a “pay as you live” basis. |
| ‘Predict and prevent.’ Such integrated user stories may sound far-fetched, but they will emerge across all lines of insurance with increasing frequency over the next decade. In fact, all the technologies required already exist, and many are available to consumers. In this evolution, insurance will shift from its current state of “detect and repair” to “predict and prevent,” transforming every aspect of the industry in the process. The pace of change will accelerate as brokers, consumers, financial intermediaries, insurers, and suppliers become more adept at using advanced technologies to enhance decision making and productivity, lower costs, and optimize the customer experience. |
| Shifting tech. As AI becomes more deeply integrated in the industry, carriers must position themselves to respond to the changing business landscape. Insurance executives must understand the factors that will contribute to this change and how AI will reshape claims, distribution, and underwriting and pricing. With this understanding, they can start to build the skills and talent, embrace the emerging technologies, and create the culture needed to be successful players in the insurance industry of the future. |
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| OFF THE CHARTS |
| China: The road more traveled |
| There is a silver lining to continued barriers to China’s outbound travel, as the domestic market witnesses an upswing in travelers looking to explore new destinations and experiences. In fact, domestic travel in China has rebounded to surpass 2019 peaks, with major online travel agencies noting a full recovery in long-distance travel across provinces. Increases in air and rail travel, and hotel bookings, clearly illustrate this rebound.
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| PODCAST |
| So close, and yet so far |
| For many consumers around the world, a return to normalcy feels so close yet so far away in light of the alarming spread of COVID-19 variants. Although it’s unclear what the next 12 to 24 months will bring, what’s certain is that consumers won’t simply revert to doing exactly what they did in 2019. In this episode of the McKinsey on Consumer and Retail podcast, three consumer-behavior experts share their insights into how consumers’ spending patterns and purchasing behaviors are changing, and what companies should do given those changes. |
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| MORE ON MCKINSEY.COM |
| The ‘great attrition’ or the ‘great attraction’? The choice is yours | A record number of employees are quitting or thinking about doing so. Organizations that take the time to learn why—and act thoughtfully—will have an edge in attracting and retaining talent. |
| Igniting your next growth business | Growth outperformers prioritize expansion into business areas where they have a “natural ownership” advantage. |
| Brand strength or margin? Both | In times of uncertainty, strong brands are more important than ever. But how do you pursue ambitious marketing goals while keeping the budget in check? Modernizing strategic and tactical management is essential. |
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| WHAT WE’RE READING |
| Marino Mugayar-Baldocchi |
| Marino Mugayar-Baldocchi, a research science specialist based in New York City, holds a doctorate in industrial-organizational psychology. As a member of McKinsey’s Organization Practice, he specializes in future-of-work topics and talent management—and is a strong believer in the power of learning through mentoring relationships.
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| I spend my days steeped in things like behavioral/organizational psychology and survey design but turn to fiction for some of the deepest explorations of what makes people tick. |
| I am a romantic, so of course I love reading novels about love. One of my favorites is The Course of Love by Alain de Botton. In a twist, de Botton delves into what happens after the fairy-tale stage, once two people have decided to be together. De Botton, the author of How Proust Can Change Your Life, focuses on the trials and tribulations of love over the long term, and how it is a skill that must be worked on every day if it is to have a healthy and steady course. |
| Letters from Skye, by Jessica Brockmole, fills the heart with timeless romance. Told through correspondence between two people separated by geography and war, it centers on the power of words to transport us beyond our current environment. By expressing themselves so honestly in letters, these two free themselves of the trappings and expectations that have squelched who they truly want to be. |
| I am also a big fan of wartime novels, and All the Light We Cannot See by Anthony Doerr is one of the best I have read. Set amid the devastation of World War II, the book’s short chapter structure and shifting points of view between narrators (a blind French girl and a German boy who is part of the Hitler Youth) reveal the deep humanity present in the smallest moments. At its essence, the book reveals the power of the human spirit as we adapt to tragedy, uncertainty, and new beginnings. |
| I reread Winnie-the-Pooh, by A. A. Milne, every two or three years. Believe me, this book is not just for children—its profundity seems to grow each time I read it. Pooh’s philosophy reminds us to connect with our inner child and to come to terms with who we are. My favorite bear line is, “I always get to where I’m going by walking away from where I’ve been.” It reminds me to not be afraid to explore new paths. |
| I also recommend Gabrielle Zevin’s The Storied Life of A.J. Fikry, about the deeply cranky owner of a failing bookstore who loses his prized edition of Edgar Allan Poe poems. But then a mysterious package arrives and his chance at redemption begins. It is a wonderful ode to the power of literature, told with a charmingly dry sense of humor. |
| For those interested in Buddhism, either philosophically or from a religious point of view, What the Buddha Never Taught by Tim Ward is a must-read. It creates a bridge of understanding for people who come from a strongly individualistic, Western background. This true story about living in a monastery in Thailand, recounted with humor and respect for the human condition, can help readers understand Buddhism as a way of life. |
| — Edited by Barbara Tierney |
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| BACKTALK |
| Have feedback or other ideas? We’d love to hear from you. |
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