Redefining Insurance: A Scenario-Based Analysis

by Juan Mazzini,  Michael Fitzgerald, October 21, 2016
Industry Trends
Global, Latin America

Abstract

Celent has released a new report titled Redefining Insurance: A Scenario-Based Analysis. The report was written by Michael Fitzgerald and Juan Mazzini, senior analysts with Celent’s Insurance practice.

Rising customer expectations regarding digital service delivery, numerous advances in technology, and threats from entrants from the startup world are pushing the pace of change in insurers. This report details a scenario planning model that can help insurers extract clarity from confusion. It then presents the results of a workshop with insurance professionals on a specific scenario.
 
Given the pace and consistency of change, insurers should adjust their planning methodologies accordingly and consider the use of scenario planning. Leading insurers are embracing continuous innovation as a new corporate capability. Scenario planning can be a tool to develop organizational consensus about the priorities for change.
 
“The interactive nature of the scenario planning process demonstrated a general agreement regarding the urgency to change the insurance model from one of indemnity to one of avoidance. Participants feel that this change is inevitable and a near-term opportunity/threat,” commented Fitzgerald.

“Scenario analysis is especially impactful for insurers because the industry is based on very old assumptions about how the world operates, the nature of business, and risk. The digital storm that defines this decade modifies these assumptions,” said Mazzini.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Introduction

2

 

Key Research Questions

3

 

Description of Scenario Exercise

3

 

Results

4

Scenario: Insurance Products Change from Indemnity to Loss Avoidance

5

 

Scenario Description

5

 

Participants’ Assessments

6

 

Celent Assessment

12

The Path Forward

14

Leveraging Celent’s Expertise

15

 

Support for Financial Institutions

15

 

Support for Vendors

15

Related Celent Research

16

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