Transformative trends are shaping the future risk landscape, creating $200+ billion of market potential for insurers by 2030. The top 10 opportunities will enable insurers to respond to customer demand while increasing the industry’s relevance, growth and diversification. To capture this growth, insurers need to understand relevant trends and begin transforming their businesses accordingly – through product development, talent and business culture.
London, UK (June 22, 2023) – Aon plc, a leading global professional services firm, is pleased to announce the release of a Transformative Trends report, An Opportunity to Create New (Re)Insurance Markets.
Global transformative forces have been changing the way we live for centuries. Think electricity, automobiles, the Internet. Today, we see a multitude of megatrends emerging that will profoundly change our world, from climate change to artificial intelligence and the Metaverse.
These trends will also drive the (re)insurance markets of the future, creating demand for both traditional and new protection products, as well as services that prevent and mitigate risk. Take, for example, the rapidly growing global market for shared mobility, which is expected to reach almost $1 trillion by 2030. The shift to electric autonomous vehicles could create a $300 billion global market by 2030, predominantly in motor, but also cyber, casualty and aviation.
Using in depth analysis, Aon’s Strategy and Technology Group (STG) has identified the ten most promising megatrends with the potential to generate billions of dollars in additional premium for insurers. Many of these growth opportunities are immediate, or would require relatively small investment in talent or technology by (re)insurers. Other trends are less well developed, yet they represent potentially huge future markets for insurance.
At a time when the value proposition of (re)insurance is under growing pressure, megatrends present an opportunity for the industry to grow its relevance, while also creating new markets and increasing overall premium. Combined, the Metaverse, Shared Mobility and Intellectual Property combined could generate some $80 billion in gross written premium by 2030. Prescriptive analytics, which is less well developed, alone could generate some $100 billion in additional premiums.
Not all megatrends will create opportunities for insurance. Some are just too vast and uncertain to justify significant investment. But many demonstrate clear demand for risk transfer products and the chance to create entirely new markets for insurance. The challenge for the industry is to sift through the bewildering array of interconnected megatrends and sub-trends, to identify and prioritize the ones that are most relevant for individual (re)insurers to act upon.
Identifying (re)insurance megatrends early will enable (re)insurers to seize opportunities and manage risks proactively. (Re)Insurers will need an informed and deliberate strategy – supported by data, artificial intelligence and insights – to make better decisions around protecting and growing their business in the context of a changing risk environment. Attracting a wider range of skills and talent, harnessing technology, and creating the right culture to spur innovation will help transform their business for the future.
In a rapidly changing and volatile world, (re)insurers clearly play a critical role in protecting communities and building resilience. Megatrends will create new risks and challenges for society over the coming decades, as individuals and businesses adapt to a changing environment and fast-paced advances in technology. As risk experts, (re)insurers are wellpositioned to help deepen our understanding of these risks, enable innovation, and absorb the risks that others cannot.
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About Aon
Aon plc (NYSE:AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Our colleagues provide our clients in more than 120 countries with advice and solutions that give them the clarity and confidence to make better decisions to protect and grow their business. For more information, visit www.aon.com.
SOURCE: Aon plc
Tags: Aon, Artificial Intelligence (AI), climate change, market dynamics, reinsurance, Transformation, trends, Virtual Reality (VR), whitepaper
