Insurance 2030: Commercial P&C considerations

The spectrum of change we describe in Insurance 2030 affects all carriers, regardless of their specific lines of business. Likewise, we think most readers will recognize the buyer personae we’ve developed, even if their customers are not exact matches.

Of course, there are some issues that are very specific to industry subsectors. This first in a series analyzes the implications of particular relevance to commercial property and casualty insurers and their stakeholders.

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  • Agents and brokers: Account- instead of line-based solutions would help us provide customers more customized, holistic solutions, as well as better manage our books of business.
  • Small and mid-size commercial customers: We’d love it if we could actually understand what our policies say so we know what’s covered and when. That’d also help us know if we have any coverage gaps.
  • Securities holders, regulators and employees: We need you to maintain profitable returns across credit and underwriting cycles. How can you do this in an increasingly volatile and costly claims environment?

Solutions

Creating flexible, customer-centric risk transfer solutions

There’s a general lack of plain-English product descriptions, not least because there’s a lack of standard coverages. This is especially true with small and medium-size businesses, which (unlike many larger companies) rarely employ dedicated risk managers responsible for understanding protection needs and related policy terms and conditions.

Although many carriers offer bundles to better serve customer protection needs, we suggest moving away from current product-centric models and instead designing more holistic, account-level coverages. Instead of requiring customers to seek out and interpret offerings, basic risk assessment can take place via easy-to-understand, chatbot-assisted online questionnaires that AI capabilities validate. This will facilitate the writing of policies that cover key risks, thereby reducing coverage gaps, at risk-based prices.

Better yet, simplifying products and adopting an account-level approach helps more than just customers. For carriers, the operational benefits of policy simplification include code and rate refreshes that facilitate:

  • Rationalized, higher quality data and therefore more insightful and timely reporting. This is crucial for small commercial portfolio management because low- to no-touch underwriting needs timely and effective analysis and oversight.
  • More accurate underwriting appetites that provide agents a clearer picture of what they should offer customers.
  • New perspectives on both commercial and specialty risks. This includes capacity support of simplified products as well as potential contributions to and input on the drafting of simplified policy language. Significantly, this should carry over to simplified small commercial treaties.
  • More efficient and economical risk transfer across lines of coverage, leading to better bottom lines, fewer regulatory concerns and more positive employee and customer experiences.

Contributors

PwC's Francois Ramette (Principal), Joseph Calandro (Managing Director), and Jonathan Blough (Director) contributed to the Insurance 2030: Commercial P&C considerations report.

Industry perspective

PwC's Marie Carr and Joseph Calandro talk with Kimberly Holmes, Chief Actuary of Liberty Mutual Global Risk Solutions about innovation, risk, and analytics used to improve distribution management.

Joseph Calandro

Managing Director, PwC Insurance Consulting

Marie Carr

Principal, PwC Insurance Consulting

Kimberly Holmes

Chief Actuary, Liberty Mutual Global Risk Solutions

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