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Disruptors ‘open new doors’ for insurers

A quartet of disruptive forces upending the global economy have created growth opportunities for insurers, according to reinsurance broker Guy Carpenter.

Insurers that accept and innovate will have a better chance of flourishing in the new economic order, shaped by growing urbanisation, technological advances, rising connectivity and an ageing population.

“Fundamental disruptive forces are driving monumental changes in the global economy at an unprecedented rate,” Vice-Chairman Global Strategic Advisory Victoria Carter said.

“These forces compel the (re)insurance industry to adjust to the new reality and capitalise on the opportunities created.

“The (re)insurance industry, faced with a rapidly changing world, must re-evaluate its role and recognise that the traditional business model is not designed to meet the demands of this new environment, even though it may continue to generate revenue.”

An estimated $US43 trillion ($57 trillion) will be invested in urban infrastructure between 2013 and 2030, meaning there is a huge market for insurance services, she says.

Growing connectivity and technological advances have opened a new phase of globalisation, creating new demand for insurance-related services and products.

“The rate of technological change is accelerating in scope, scale and economic impact,” Ms Carter said. “Concomitant with technological change is the world’s increasing hyper-connectivity, from trade and capital to the movement of people and transfer of data.

“These changes can be unsettling, but as new risks emerge, opportunities to transfer risk follow. As the insurance industry harnesses the data and new technology, its ability to understand, measure, monitor and price risk significantly improves.”

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