Filed Under:Agent Broker, Agency Technology

5 Megatrends That Will Revolutionize Insurance

At IICF's Women in Insurance Regional Forum, PwC experts examine five global certainties that will impact insurance, business, and the world.

Kelley Buchanan and Tim Ryan of PwC discuss megatrends at IICF's Women in Insurance Regional Forum in Chicago.
Kelley Buchanan and Tim Ryan of PwC discuss megatrends at IICF's Women in Insurance Regional Forum in Chicago.

A megatrend is not a prediction but a certainty, an event with global ramifications that is already unfolding and affecting people. And although the more massive of these megatrends can be intimidating, they present more opportunities for creative thinkers who can rise to the challenge of solving them.

Learning to surf the wave of megatrends was the topic of "Trailblazing: Frontiers of the Future," a presentation at the IICF Women in Insurance Regional Forum, held last week in Chicago. The event was part of IICF's four-city (Chicago, Los Angeles, New York and Dallas) event, designed to accommodate more attendees than last year's inaugural event in Manhattan.

1

Technological breakthroughs. Everyone is aware of the rapid pace of tech advances, but few stop to consider just how revolutionary the tech boom actually is. In 2003, the world population was 6.3 billion with 500 million connected devices, for 0.08 devices per person. By 2020, the world population will hit 7.6 billion and there will be 50 billion connected devices, at 6.58 devices per person. 

2

Climate change and resource scarcity. It's not a political view or mere "tree-hugging," but a stark demographic reality, Ryan stresses. Present-day Los Angeles does not have enough clean water; and in Atlanta, 40% of clean water is lost through faulty infrastructure.

4

Demographic shifts. The global population is seeing unprecedented shifts in race and age. Based on current birth rates, the U.S. Census Bureau projects that whites will become a minority in the U.S. by 2043. And in a few years, the U.S. population will have roughly the same amount of people over age 70 and under age 5, something that's never happened before, Ryan says. At least 45 countries are experiencing population declines, with the other 60% flat or increasing. There are currently about 350 million globally over age 70; in 10 years, this figure will go to 1 billion.

3

Accelerating urbanization. As part of changing demographics, more people around the world are moving to urban areas. In 2008, 50% of the planet’s population lived in cities. This number will swell to more than 72% by 2050, in a migration that Ryan calls “the biggest drama this world has ever seen.”

5

Shift in global economic power. The U.S. will no longer be the economic powerhouse that has defined the country since the post-World War II days. This change is “inevitable” based on the hothouse growth of emerging markets, Ryan says. In 30 years, the GDP of these emerging markets of the E7 countries (China, India, Brazil, Russia, Indonesia, Mexio and Turkey) will be double that of the shrinking G7 countries (U.S., Japan, Germany, UK, France, Italy and Canada).

How can insurance respond to these megatrends in a way that will foster success? The answer lies in outlier thinking and adapting to consumers' changing needs.

Ryan recalls attending a meeting 15 years ago where the CEO of a national drugstore chain was publicly pondering the risks involved with establishing drive-through pharmacies. It would have been easy for the company to veto the idea based on that risk, but in the process would have been ignoring a social need--and in turn, would have ruined the company, he says.

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