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Will 2023 form the beginning of the next big transformation journey for insurers? 

Opinion by: Joachim Allerup, Expert Partner, Bain & Company   

The Nordic insurance industry has been performing well in the last decade, with significant investment and focus on driving internal digitalization and automation to optimise profits and improve customer experience.

However, with the advent of artificial intelligence (AI), there are new opportunities for both automation and new revenue generation, and insurers need to think beyond just the core business. The next wave of transformation and innovation is prime to affect the industry, and insurers must engage with insuretech and other tech companies to strengthen their future position and growth potential 

While the future growth of the Nordic insurance market is expected to remain relatively flat in the coming years, with market forecasts for non-life premiums suggesting a moderate annual growth of ~3-4% until 2026, there are still scale and efficiency gains to be captured from the core business. AI digitalization and automation will remain a strategic focus area for 2023, as the industry continues its path to optimization 

New technologies

However, this alone will not drive significant topline increase or unlock ground breaking differentiation. Insurance companies need to use the new technologies to not only optimize the core business but also think beyond the traditional risk transfer mandate into a more holistic set of services and new arising eco-systems, which will eventually expand their footprint. Typically within home, mobility and health services. 

Bain research shows a gap in the market with ~60-80% of Nordic consumers interested in integrated ecosystem services, and see the insurance companies as the natural (and trusted) owners of these. So, whereas most Nordic insurers have already made decisive attempts at using AI and digitalization for better incremental services, few have started really branching out to new Engine 2 initiatives or started rethinking the core. 2023 seems to be the definitive breakthrough of AI and possibly also blockchain and hence might very well be the final initiator of making insurers go from incrementally optimizing the core to re-defining the core – and beyond. Hence it also offers an opportunity for true differentiation for those who understands how to implement the new technologies with the customer experience in focus and an eye for new eco-system driven revenue streams. 

The speed of change

Especially in the long run technologies like AI and blockchain will significantly affect the industry; especially as automation of transactional engagements leaves insurance companies with even less options to differentiate on the core offering – unless they add an additional focus on how AI can be used to deliver innovative customer experiences with new creative marketing efforts, personalized UX, digital membership assistance, new product generation and re-thought claims prevention. The speed of change is once again accelerating. Hence, leveraging an efficient, digitalized, optimized and re-thought Engine 1 (core business) to develop Engine 2 (new business) is becoming a pivotal priority for insurance leaders.  

In conclusion; The Nordic insurance industry has done well in driving digitalization and automation internally. The next wave of transformation and innovation is poised to affect the industry. Insurers need to focus on partnering with companies that offer value to their customers and use their expertise (and data) to expand their offerings beyond traditional risk transfer products in order to ensure that they are well-positioned for the future. 

As a natural starting point, insurers should identify the long-term impact of AI and other technologies and use this to define their “future back” opportunities. To inform this process, insurers must at all times keep abreast of the industry’s ongoing risk assessment and comply with evolving ethical guidelines.  

Only with a clear view of the strategic impact of these emerging technologies can companies start the next big transformation journey on the right foot. 


NFM Publishing Team
NFM Publishing Team
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