After global warming, the digital transformation is the trend with the greatest effect on society and the economy.

VIG’s customer base already shows how dramatic the change will be. By the middle of the next decade, every second VIG customer will be from generation Y, that is, people who grew up with Amazon, Facebook and Instagram, and therefore expect companies to provide similar services. 84% of all insurance companies worldwide are therefore working on their “digital agility”, according to a study by the advisory company Capgemini. Digitalisation is creating seismic shifts in the insurance market at the same time, with new players from the start-up scene (“insurtechs”) and the “big techs” from Silicon Valley potentially forcing their way into the market.

Two things are no longer in doubt. People bear a large part of the responsibility for climate change.

And this will have significant observable effects in coming decades – even if global greenhouse gas emissions were to shrink to zero today. Weather phenomena, such as storms, heavy rainfall and heatwaves, will not only become more extreme, but also considerably more frequent and cause greater total losses. As the figures show, the insurance industry has already been affected by climate change risks for a number of years. Data from the reinsurance company Munich Re shows that there have only been three years since 1980 where insured natural catastrophe losses exceeded USD 100 billion, after adjusting for inflation – all of which occurred after the turn of the century. The risks to the insurance industry from climate change are difficult to calculate, because it is a unique event and there is almost no past data that can be used. This will change significantly in the future, that is by around the end of the next decade: Worldwide networking of devices and their sensors will provide significantly more detailed data for insurers than is available today. So-called “parametric policies” will also be used more frequently. They will automatically link claim payments to certain weather parameters, such as wind velocity, making expensive loss assessments unnecessary. Drones will be used, however, when losses due to capricious weather events still need to be assessed.

Sent to the doctor before becoming really ill? Warned about pipe breakage by the insurance company before major losses occur?

Providing services to prevent losses like these will only be possible because of the connectivity trend. In 2017, there were already 7.7 billion mobile phone contracts, more than the entire population of the earth. Most people considerconnectivity a natural and necessary part of their everyday life, and it is in the process of becoming an “Internet of Everything”, because more and more machines are being connected to the network. According to statistics, somewhat more than 20 billion devices are connected today, and this is expected to grow to three times this amount in the next few years. Most of them have sensors, and these sensors, when combined and analysed using artificial intelligence (AI), will provide an ever more detailed picture of reality.

The future of European mobility can be summarised as 30/30.

The consulting firm PwC estimates there should be around 30% fewer cars on European roads by 2030. Driving your own car to work will be just one of many mobility concepts by then. As soon as fully autonomous driving has become standard, robo-taxis will occupy an important position in the mobility chain to make changing between various mobility providers much more flexible than it is today. This represents an evolutionary shift similar to the change from the horse and buggy to automobiles, and will require profound changes by motor insurers. Autonomous driving will likely reduce the number of cars significantly while increasing the distance driven by each car. The vehicle ownership model will also change. At the same time, customers will expect more custom-tailored services, and motor insurance will gradually change into mobility insurance. Telematics insurance that uses customer driving behaviour to better determine customer needs and offer more appropriate products is one step in this direction.

The desire for greater autonomy and self-determination is so commonplace in Western societies today that the trend to individualisation is hardly noticed any more.

Lifestyles and biographical models are becoming more diverse. This applies to both markets and products. At the end of the differentiation process, we arrive at a target quantity of one. The strategic advisory company zeb predicts that modular design and extensive process automation will also make this possible in the insurance industry in a few years, without losing the collective mechanism underlying insurance. Instead of products, each customer will receive comprehensive solutions that are custom-tailored to their lifestyle and also include non-insurance services.