How would you like to be able to achieve an increase in premiums at a compound annual growth rate of 24 percent for the next few years? Not probable, you say? Actually, that's the figure a McKinsey study has projected for the commercial and personal auto insurance market in China, where the "transition from bicycles to cars in urban areas has ignited the country's automobile insurance market."
An enviable position to be in? Maybe. It also turns out the industry's profitability is lagging behind growth, according to McKinsey, because while Chinese insurers chase the renminbi, little effort has been expended on underwriting or managing claims–and those are what boost the bottom line.
The study indicates most carriers haven't invested in business processes to distinguish between high- and low-risk customers or profitable or unprofitable distribution channels. Part of the problem, states McKinsey, is the needed information is difficult to obtain and manage.
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