XL chief executive Mike McGavick’s top five factors for innovation in insurance

Globalisation and new sources of analytics are among five key factors currently affecting the insurance industry, according to XL chief executive Mike McGavick.

StrategicRISK’s sister title GR reported that McGavick told delegates at The Economist’s Insurance 2015 event that the five factors in question are: increasing globalisation affecting client relationships; the evolution of new types of analytic software that can be used to help clients; the changing role of the brokers, and their relation to the market, owing to consolidation; the disruptive influx of alternative capital into the reinsurance sector in recent years; and the impact of increasing regulation on the insurance industry.

McGavick said these factors have led to more insurance innovation and consolidation.

“In each of these cases, size will matter more,” he said. “There is a heavy cost for being globally compliant and few insurers can provide this outside of the Lloyd’s cover structure.”

On innovation, McGavick added: “The expectations of individuals are so radically changed that we cannot help but reinvent every element of the process. In the future, underwriting will be the core element that the industry contributes to the world.”