Future of Insurance

The effects of the COVID-19 pandemic are big for insurers as well. Think of an increase in the number of damages, for health, credit and business insurance to name a few examples, the impact of the government measures, the pressure on sales because of the reduced business activity, and less direct contact with the client. The latter is definitely an issue in case digitization of distribution channels is not on a certain level.

The increasing economic uncertainty, because of the pandemic, creates pressure at the stock exchanges and for an increase in the credit risk of organisations and individuals, which can lead to a possible default. In combination with the low interest rates this can lead to pressure of solvability and liquidity positions. This all increases the change that supervisors will demand for extra information to determine if insurers could absorb the immediate effects of the pandemic.

All in all, this list with challenges hits a sector, which already had been weighed down by continuing low interest rates and a limited growth in a mature market. This not only applies for the short term, but also for the sustainability of the business models of insurers for the long term. In this respect, the COVID-19 crisis could be an accelerator for sustainable renewal in the sector as well.

PwC wants to help you, and together with you, take care of the negative implications on your organisation by reducing those implications as far as possible and that you will be well positioned for the future. We are there for you and together we can find solutions for your immediate questions and demands.



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Target Operating Model (TOM) - 5 archetypes

The current insurance revenue model is under pressure. Economic, demographic, technological and social trends require reconsideration of the business model to maintain a competitive position in the market and continue to fulfill a fundamental role in society. Developing a sustainable business model in a highly volatile market requires building on large trends as well as on your own strengths. We developed five archetypes that can serve as growth strategies to establish and maintain a competitive position: Love Brand, Ecosystem Orchestrator, Service Provider, Balance Sheet Giant and White Label Insurer. 

In search for competitive advantage, insurers must make a choice on their sustainable (growth) strategy to become and stay future proof. Depending on the chosen growth strategy, insurers have to consider the impact on their organizational set up and the available capabilities within their organization. For each archetype, we outline the organizational model and the most important capabilities required to move towards a certain archetype. Note however, that the archetypes serve as guides to make a well-considered choice for the future. It is not necessary to move rigidly to one specific archetype only, as strategic and operational choices will depend on your own strengths and maybe even a differentiation of your strengths within focus areas or business lines. 

Per archetype, the impact on the current operating model will have to be determined as well as the core capabilities needed to be developed towards a Best in Class performance.

TOM model

The Accelerator: co-creation for the digital transformation

PwC has put together a multidisciplinary team of experts in the field of business and software development that is able to generate IT solutions to manage business issues.

Read more about The Accelerator

Automated Risk Insights

A platform that facilitates automated risk analyses on the financial statements of customers, counterparties and suppliers.

Customer Lifecycle Interaction Platform

A Salesforce-based platform that brings together all of the parties involved in a Customer Due Diligence, including the clients themselves.

Technology and new pricing strengthen profitability  

The future of insurers is determined by agile and digital organisations. InsurTech and digital technology will increasingly become more crucial. New ways of pricing, ongoing cost reduction and market consolidation are other subjects that will strengthen the profitability of insurers.

Cost reduction as strategy

To ensure the future competitiveness in a saturated market, cost reduction will remain a key strategic topic. Even the narrow margins, the low interest rates and the ban on commission for complex products demand a fierce cost policy. How do you ensure that your organisation keeps the costs low for your legacy systems and closed books?

This is how we can help you

A continuous strategy of cost reduction asks, among other, research for outsourcing, for example your back office, the operation of support departments. Our strategy consultants of Strategy& develop together with you a growth strategy and accompanied operating model where digitisation will be placed.
To reduce complexity in your organisation, we work on simplifying and standardising your organizational structure and your commercial and internal processes. We guide in all aspects of transformations, like adjusting your administration to cloud computing and changing the working culture

This is how we can help you

‘We have discussions about the dilemmas that insurers face, because we are convinced that critical discussions will help the sector forwards.’

Gert-Jan Heuvelink

Contact us

Gert-Jan Heuvelink

Gert-Jan Heuvelink

Partner & EMEA Insurance leader, PwC Netherlands

Tel: +31 (0)62 054 29 72

Matthijs Kortenhorst

Matthijs Kortenhorst

Partner, PwC Netherlands

Tel: +31 (0)62 272 83 07

Amanda Korver-Heins

Amanda Korver-Heins

Partner & Insurance leader, PwC Netherlands

Tel: +31 (0)62 266 17 54

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