In the news. AI is making it easier and faster for hackers to exploit software vulnerabilities, forcing cyber insurers to rethink risk assessment. As The Wall Street Journal reports, insurers are moving beyond preventive security controls and placing greater emphasis on how quickly companies can detect, patch, isolate, and recover from attacks. Underwriters are also scrutinizing organizations’ exposure to widely used software and third-party vendors as AI increases the potential for a single vulnerability to trigger widespread losses. The result is a fundamental shift in underwriting: Insurers are evaluating not only how companies prevent attacks but also how effectively they respond when defenses fail. [WSJ]

The firms generating the most durable value from AI start with a sharp thesis: What kind of company are we building, and what business problem are we trying to solve?

On McKinsey.com. Along with changing how insurers assess risk, AI is transforming how they run their businesses. McKinsey’s Jason Ralph, Johannes-Tobias Lorenz, Nick Milinkovich, Sid Kamath, Tanguy Catlin, and Gabriella Meijer argue that insurers that redesign their operating models around AI—not simply deploy new AI tools—could gain a lasting competitive edge. To get ahead, executives can define a clear AI ambition; move beyond individual AI use cases; build the technical, operational, and talent capabilities required to scale AI across the enterprise; and invest in the change management needed to deliver business value.

Explore AI’s impact on insurance

In the news. Healthcare organizations are rethinking how they prepare physicians for leadership. The American Medical Association notes that even when physicians deliver excellent care, patients can still be harmed by broader systemic failures. Healthcare leaders increasingly recognize that improving patient outcomes requires physicians who can lead change across the enterprise. They are treating leadership as a capability to intentionally develop—emphasizing emotional intelligence, operational fluency, financial stewardship, and flexibility. Organizations can build the next generation of physician leaders by identifying talent early, providing dedicated time for leadership development, and offering broader exposure to enterprise strategy. [AMA]

On McKinsey.com. Successful physician CEOs emerge through deliberate institutional design, not chance. Drawing on interviews with nearly 40 physician CEOs, McKinsey experts Amit Shah, MD; David Knott; Kurt Strovink; Laura Medford-Davis, MD; Ramesh Srinivasan; and Sanjiv Baxi, MD, present a development framework for translating clinical expertise into enterprise leadership. They argue that successful physician CEOs amplify the strengths of their clinical training while deliberately building the capabilities needed to lead complex healthcare organizations. Healthcare organizations can strengthen their leadership pipeline by distinguishing CEO potential from clinical excellence early on and giving emerging leaders deliberate exposure to decision-making across the enterprise.

Create physician CEOs

A comeback moment for luxury

In the news. After years of weak demand and discounting, global luxury brands are seeing their first meaningful growth opportunities as affluent shoppers in China begin spending on premium products again. As Bloomberg reports, several luxury and beauty brands are seeing stronger demand for higher-end products while pulling back on promotions, a shift that could help stabilize margins. The rebound appears to be fueled in part by rising equity markets and improving consumer sentiment, but analysts caution that luxury’s recovery remains fragile and is unlikely to signal a broader revival in Chinese consumer spending. [Bloomberg]

On McKinsey.com. Recovering demand alone will not determine luxury’s next top performers, according to a new McKinsey report published in collaboration with The Business of Fashion. Drawing on a survey of more than 2,000 luxury clients in the United States and China, McKinsey’s Anita Balchandani, Cyrielle Villepelet, Gemma D’Auria, and coauthors find that emotional connection has surpassed status as the strongest driver of desirability. Additionally, AI, resale channels, and immersive brand experiences are reshaping how consumers discover, evaluate, and engage with luxury. Executives can seize the opportunity by strengthening brand meaning, extending memorable experiences to aspirational clients, rewarding loyalty, and treating AI and resale as strategic channels for building long-term customer relationships.

Rethink growth in luxury