2 minute read 29 Oct 2020
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How insurers can improve growth and optimize expenses while managing risk

Authors
Ed Majkowski

EY Americas Insurance Sector and Consulting Leader

Transformational insurance leader.

Thomas Cranley

EY Americas Insurance Solution Leader

Seasoned insurance executive advisor. Leader in agile transformation enabled by people and technology.

Madhav Mohan

EY Americas Insurance Managed Services Leader

25+ years of global consulting experience. Entrepreneur. P&L Leader. Client Partner. Thought leader on new operating models and managed services. Speaker. Traveler. Runner. Golfer.

Avi Chaudhuri

EY Americas Financial Services Managed Services Leader

Globally experienced insurance advisor. Focused on next-gen operating models. Outcome-driven, passionate managed services leader.

Nitin Bahl

Senior Manager, Insurance Managed Services, Ernst & Young LLP

Insurance industry transformation leader and out-of-the-box thinker who is passionate about developing leaders who will elevate their teams, clients and firms. US national parks enthusiast and poet.

2 minute read 29 Oct 2020
Related topics Insurance Financial Services

This joint study with ACORD sheds light on why select insurers have performed significantly better than others over a sustained period.

Three questions to ask

  • Are your cost take-out and expense reduction targets ambitious enough?
  • Is your business model equipped to solve challenges across growth, risk and expense?
  • How do you achieve continued high performance even as the industry goes through unprecedented change?

For an industry that has stayed largely the same over the past century or even longer, insurers have of late been navigating through significant waves of change. The old guards of the US property & casualty (P&C) industry are facing severe headwinds on the one hand, while on the other have been fending off intruders at their gates. Underlying socioeconomic, technological and regulatory changes are joining hands with the changing nature of risk itself to recast the role and value of the traditional P&C insurer. The changing nature of tomorrow’s risk, coupled with technological advances and ever-increasing consumer expectations, are also paving the way for new entrants with significant proprietary consumer behavioral data and highly differentiated digital and analytics capabilities.

Given the tremendous opportunity ahead, EY and ACORD studied the 100 largest US P&C insurers and looked at their performance over the past two decades to see which insurers are consistently shaping up the market and setting the pace for the industry to follow. Based on this detailed one-of-a-kind analysis, we have shared key execution imperatives that can be used by insurers to improve their transformation efforts toward achieving sustained growth, risk and expense management.

As the results of our analysis showed up, it became increasingly evident why the top focus areas for the US P&C industry happen to be what they are. While each focus area deals with a specific dimension of the insurance value chain, together they address the three greatest challenges facing the industry today: growth, risk and expense management. Key focus areas identified in the study include:  

  • Operational excellence and cost efficiency
  • Risk selection, management and underwriting excellence
  • Alternate distribution channels and digitizing distribution
  • Customer experience improvement
  • Mastering emerging and disruptive technologies
  • Talent acquisition, development and retention

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Summary

Closing the expense gap will allow insurers to capture potential value and position themselves for success.

About this article

Authors
Ed Majkowski

EY Americas Insurance Sector and Consulting Leader

Transformational insurance leader.

Thomas Cranley

EY Americas Insurance Solution Leader

Seasoned insurance executive advisor. Leader in agile transformation enabled by people and technology.

Madhav Mohan

EY Americas Insurance Managed Services Leader

25+ years of global consulting experience. Entrepreneur. P&L Leader. Client Partner. Thought leader on new operating models and managed services. Speaker. Traveler. Runner. Golfer.

Avi Chaudhuri

EY Americas Financial Services Managed Services Leader

Globally experienced insurance advisor. Focused on next-gen operating models. Outcome-driven, passionate managed services leader.

Nitin Bahl

Senior Manager, Insurance Managed Services, Ernst & Young LLP

Insurance industry transformation leader and out-of-the-box thinker who is passionate about developing leaders who will elevate their teams, clients and firms. US national parks enthusiast and poet.

Related topics Insurance Financial Services