Key to Competitive Carrier Strategies

Carriers that continue to work from vague three- to five-year timelines will lose market share and perhaps wind up as someone else’s acquisition.


The business of insurance is much harder than it used to be. Achieving growth without risking profitability is challenging, climate change is affecting risk profiles and increasing regulatory scrutiny, distribution has become truly omnichannel and customers expect products tailored just for them. At the same time, technology has continued its relentless advance, and an emerging ecosystem is threatening to shake up customer acquisition. Incremental change is not a viable option anymore, and industry executives now have to make deliberate and aggressive strategic choices to succeed.

Of course, these were growing challenges for the industry even before the pandemic, but their pace and impact have greatly increased over the last two years. Customer, employee and other stakeholder expectations have changed more in that time than they did in the previous two decades. This has put immense pressure on the industry, and carriers have had to adjust literally overnight. Even though the pandemic has ebbed and flowed, the pace of change remains relentless.

Are you capitalizing on your strengths?

Despite accelerating disruption, most carriers still have a competitive advantage. They focus on a particular strength, typically:

  1. Digitization, data and integration, 
  2. Brand and distribution, 
  3. Products,
  4. Strategic partnerships, or
  5. Structuring.

But many carriers also fritter away their advantage. They typically underinvest in their strengths and fail to act with urgency. This isn’t sustainable in the face of new entrants that are moving quickly, with great focus and discipline, to capitalize on industry disruption. Carriers that continue to work from vague three- to five-year timelines are likely to lose market share and perhaps even wind up as someone else’s acquisition. In other words, commitment without action won’t get you far. You need to fully fund and support your way to play and hold yourself accountable for the results. This may sound self-evident, but we’ve seen time and again that most carriers simply don’t do it.

See also: 2-Speed Strategy: Optimize and Innovate

What makes a winner?

Based on our experience working with all segments of the industry, we’ve observed that most successful insurers in today’s environment have a few key traits. In particular, they:

  • Define a strategic direction and say “no” to what doesn’t fit. Simply setting financial goals isn’t enough. Committing to a way to play, then continuing to do everything you did before while funding whatever else comes along, is not a strategic direction.
  • Fully fund their strategy. They don’t shortchange big bets or dilute key investments with allocations to less vital areas. 
  • Get creative with products. They’re able to identify new product categories (as opposed to just adding new features) and have the brand strength to deliver them. 
  • Get involved in partnerships and make deals that enable and enhance their core strategy. They make deals, use insurtech innovations and get involved in ecosystems only when they align with their strategy and enable their ways to play.

Market leaders also know that even a clear and consistent strategy is going to founder if their technology can’t enable it. They’ve gone far beyond just “digitization.” A successful technology approach has several components, but flexibility and speed -- attributes that cloud greatly facilitates -- are vital. Practically everything in insurance eventually becomes a margin game, with the advantage going to the carriers that can scale effectively, drive out cost and achieve broad price competitiveness. If you can’t, you’re going to lose customers, employees and investors.

The path forward

None of this is easy, and no single company has mastered all of the ways to win in today’s challenging market. But we’ve never seen a truly competitive insurer that didn’t at least: 

  1. Set and stick to clear goals. 
  2. Have a technology strategy that supports the business and operations.
  3. Fully invest in and hold itself accountable for achieving 1 and 2.

Whatever your business focus, these three are essential.

Marie Carr

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Marie Carr

Marie Carr is the global growth strategy lead and a partner with PwC's U.S. financial services practice, where she serves numerous Fortune 500 insurance and financial services clients.

Over more than 30 years, her work has helped executive teams leverage market disruption and innovation to create competitive advantage. In addition, she regularly consults to corporate boards on the impacts of social, technological, economic, environmental and political change.

Carr is the insurance sector champion and has overseen the development of numerous PwC insurance thought leadership pieces, including PwC's annual Next in Insurance and Top Insurance Industry Issues reports.


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