A few weeks ago, I had the chance to speak to Varghese Skariah from RSA during a podcast interview on the FS Brew podcast.
We briefly spoke about the all-important motor insurance portfolio
(for P&C insurers in the Middle East) and the headwinds that insurers face. If you have not heard the episode yet, please give it a listen.
The conversation got me thinking, and if I were a senior leader in an incumbent insurer, the following is a list of items that would be keeping me awake at night:
- Motor Premiums will start to drop over a 10-15 year period as more and more vehicles go autonomous. Research reports speak of a permanent decline beginning in the 2030s
- The past 5+ years have seen the sharing economy, grocery /food delivery, and ride-hailing creating a move away from car ownership among the Millennials and the GenZs (large consuming cohorts)
- Insurers will need to lock up Auto manufacturers as they embark on their long route to EV and autonomous vehicles. Local insurers may find themselves locked out of these global deals.
-Middle East Insurance Aggregators are driving price competition and leading the way to the commoditization of product features in the short to medium-term.
- Customer attention is shifting away from monolithic financial institutions to Super apps in regions like Asia, leading to further erosion in customer ownership.
- Insurance is seen as a grudge purchase that is mandated by law. Engagement with the product is an annual event at best (during renewals or claims). Insurance continues to be sold and not bought.
What are the steps that insurers can and are taking in the region to protect themselves against these headwinds? I am speaking to several insurance leaders to understand more.
If you have any thoughts on the subject, please drop them in the comments below. It will be a valuable learning exercise for all.