Aon unveils top 10 growth opportunities for insurers
Emerging “megatrends” such as climate change, artificial intelligence (AI) and the metaverse, are profoundly changing our world and will drive the re/insurance market of the future, according to Aon’s report “Transformative Trends”.
“Billions of dollars in premium are there to be taken. Very large changes bring risk and volatility, and therefore greater demand for protection. As an industry, we cannot afford to sit on the sidelines and wait for these trends to crystallise,” said Sherif Zakhary, chief executive officer of Aon’s strategy and technology group in the report.
The report reveals the top 10 growth opportunities for re/insurers to respond to customer demand at the same time as increasing the industry’s relevance, growth and diversification.
“Many of these growth opportunities are immediate, or would require relatively small investment in talent or technology by re/insurers. Other trends are less developed, but they represent potentially huge future markets for insurance,” said the report.
Combined, the three megatrends—the metaverse, shared mobility and the rise in intellectual property (IP)—could generate $80 billion in gross written premium by 2030.
Shared mobility—which includes shared autonomous vehicles and car-sharing—is the second largest megatrend re/insurance opportunity of Aon’s top 10. Potential gross written premium is expected to exceed $40 billion by 2030 but, under certain scenarios, the mobility re/insurance market could be worth some $90 billion.
“The IP market presents an immediate opportunity for insurers, driven by a global economic shift from tangible to intangible assets. The global intangible asset value was estimated at around $60 trillion in 2022. Few carriers currently participate in this market, leaving room for new entrants and the development of new products, including forms of IP business interruption,” explained the report.
Operational efficiencies
Prescriptive analytics is less developed, but it alone could generate some $100 billion in additional premiums.
As an indicator for the prescriptive analytics trend, the overall AI market is estimated to reach between $0.5 and $2 trillion in revenues by 2030, with potential gross written premium expected to exceed $100 billion.
“Increasing demand for data-driven decision-making and the adoption of big data and AI technologies are driving market growth, but the technology is still in initial stages of development. Reinsurers are focusing on greater operational efficiencies rather than developing specialised insurance products to protect against associated risks,” said the report.
According to the report, other trends such as electrification and biotechnology offer immediate premium potential or require a relatively small investment in expertise or product development to unlock.
Other such trends, including the metaverse and biodiversity, have a bigger premium potential but involve “longer time horizons or uncertainty around trend development and market size”, says the report.
Zakhary concluded: “A deliberate and informed response to these powerful transformative trends should be top of the re/insurance industry’s agenda. Megatrends offer a once-in-a-generation opportunity for the industry to increase its relevance, to grow and to diversify.”
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