The rapid transformation of the global insurance sector: Navigating a new path to growth

Innovative new business models are being adopted by the insurance sector, resulting in a resetting of the corporate real estate portfolio, with an increased willingness to relocate in order to tap into new talent pools and knowledge/innovation networks.
3 minutes to read
Categories: Global

Insurance companies are going through a period of rapid transformation as they seek to pivot their business and operating models towards future growth markets in the face of major social, economic and technological changes. 

Examples include AXA, who established a healthcare division that offers well-being advice, health data tracking and analysis, and Ping An Insurance who have set a goal of becoming a full-blown technology company inside the next decade. It is becoming clear that the insurance company of today will not look the same in just a few years and may not at its core, even sell insurance! 

Radical alterations in business structures will require a resetting of the corporate real estate portfolio to ensure that it enables, supports and portrays business transformation. There is evidence of this happening here and now, as illustrated through two new insurance business models detailed below: 

The big data insurance company - relocating to be near the talent

Insurers are becoming increasingly reliant on more sophisticated data analysis in order to compete and differentiate, whether it is the use of data to drive operational excellence, reduce risk or gain valuable customer insights. This is leading insurers to establish data science centres of excellence in those strategic locations where the expertise resides.  

For example, Humana is establishing a centre for digital health and analytics, to be known as Humana Studio H, in Boston’s Seaport neighbourhood, where it can take advantage of a deep local talent pool and partnerships. Studio H will focus on pioneering new products and services that will then be developed for use across the organization.

The company expects to employ as many as 250 individuals at this Boston location within the next five years. 

The Tech + Insurance model –  Driving workplace transformation

The insurance industry is being radically disrupted by the application of technology, with many traditional players investing heavily in digital transformation, operating more like tech companies and employing or seeking to employ a greater proportion of tech talent. This is forcing a change in real estate requirements and in particular workplace design and fit-out.

Prudential is a prime example. This 170 year old company has been building digital capabilities to enable employees to work smarter and serve customers better such as their askPRU chatbot. In the UK and Europe they are investing £250mn, in part in digital transformation and they are forming partnerships with technology start-ups, such as UK-based healthcare technology and services company Babylon.

In response real estate is being used to driver greater collaboration, innovate at pace and attract, motivate and retain tech talent. In the UK they are relocating to a new office in Central London and they recently opened a new ground breaking hub in Edinburgh that will drive digital and data innovations.  In Singapore they launched a new innovation hub which is called Workplayce because of its intent to integrate work and play at the office. The tech-enabled space includes a range of working options for employees, rest pods, mothers’ rooms and a central linkway complete with the sound of birds chirping.

Looking forward, we anticipate that transformation will accelerate in the insurance sector as customer expectations rise, technology disrupts and competitors close in. This is evidenced by a KPMG survey of over 100 Insurance CEOs which found that 59% believe the primary goal of their investment is to transform their business and operating models. As well as the examples provided watch out for new businesses emerging in cyber insurance, peer-to-peer coverage and on-demand insurance. Ensuring corporate real estate supports new business models will be critical and as such we anticipate a wave of new market demand coming from this sector over the next five years.

Download the Global Insurance Sector Report to understand the five key trends shaping the future of the sector and what this means for real estate or, to find out more contact: