Clear Sailing for Commercial P&C Distribution?

With the rapid digitization of insurance datasets by insurers and brokers, we will soon be at an inflection point where a few players are able to create a “map of all insurable risks.” This opens up a new world, where insurers can more efficiently target profitable business that they have a high propensity to win. Insurers and brokers are already building sophisticated predictive algorithms — models that tell an underwriter which business to quote and a broker which insurer to consider for a given risk. The overall efficiency of distribution will increase dramatically when insurers and brokers are able to establish channels to transfer reliable signals based on the risk map and the models. The key hurdle is however, not data or analytics, but changing the ingrained behaviors of underwriters and brokers to adopt a new way of working. Oliver Wyman believes that this new transparency will shake up the hierarchy of the industry. Scale will be less important, and numerous players will seize opportunities to disrupt traditional arrangements and relationships. Winners will be early movers, who not only build the map and models quickly, but who are successful in changing behaviors.