The Future of Insurance – Tanguy Catlin, Senior Partner, McKinsey & Company

The Future of Insurance

Tanguy helps companies build out their digital capabilities to deliver rapid results and sustained growth. He leads the McKinsey Digital hubs across North America and Mexico. Until recently, Tanguy shepherded the firm’s property and casualty insurance work in North America.

In his client work, Tanguy helps leading global financial-services firms with analytics transformations, digitally enabled business model transformations, and core-technology-modernization programs. He also serves insurance clients more broadly on issues ranging from strategy and organization design to claims and underwriting.

In addition to his client work, Tanguy frequently contributes to industry publications and authors reports, and white papers on issues confronting the insurance industry.

Through his undergraduate and graduate studies, Tanguy was a Siebel scholar and Fulbright fellow. He is a trustee of Carano for Children, a former member of the MIT Sloan alumni board and of the Massachusetts chapter of March of Dimes, a non-for-profit organization that works to improve the health of mothers and babies.

Highlights from the Show

• Tanguy is a Senior Partner at McKinsey & Company, working in their Insurance practice, and co-leads their digital practice, which covers such important things as AI
• McKinsey is talking to insurers, car makers, regulators and others around the concept of mobility
  • Current Auto insurance products were designed for an industry in decline, where combustion cars without sensors or data are being replaced by things that look similar, but are fundamentally different, which means the existing products aren't going to be fit for purpose
  • We're at the early stages of that transition, but this is when carriers should be thinking about how to respond
  • They see a world in the not-too-distant future where 30% of mobility will be ride-sharing, 50% of vehicles will be Evs, and that has profound impacts on Auto insurance
  • As evidence of this, look at the very high take-up rate for Tesla Insurance where it's available
  • The pace of change will be slower than some say given that the car fleet needs to change over to newer vehicles with new capabilities
  • Distracted Driving is working against the improvements in loss reduction faster than safety tech can lower it, so losses are increasing despite more tools to combat them
  • You will see more partnerships amongst those who succeed, while those less open to partnership will struggle
• When it comes to AI, Generative AI is not just a buzzword, but is a real disruptor that will have tremendous impact because it's about content creation, which AI has never been able to do before
  • Generative AI can tackle the one thing robots or computers couldn't – empathy at a human level
  • Given that delivering insurance service is a moment of empathy, that means GenAI can be profoundly impactful in insurance in a way that no other technology could be
  • The technology and training the models isn't the hard part of this, but culture, change management and getting the data available cleanly in the cloud is the hard part
• The dynamics have and are changing so much that Tanguy observes that the industry seems to be losing relevance, as shown by declining rates of CAT losses covered by insurers, which has dropped over time
• He sees the solution being around the massive unlock of moving from protection to prevention, which changes the importance of what we do
  • With the support of investors behind insurtechs working on solutions and carriers willing to collaborate, there is hope
  • Interestingly, while there was fear that Big Tech was coming for Insurance, they are so critical to cloud-based solutions that they can also be part of this collaborative effort

This episode is brought to you by The Future of Insurance book series (future-of-insurance.com) from Bryan Falchuk.

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