Global insurance premiums could grow to $ 10 trillion by the end of the decade as new technology reduces insurance companies' costs, drives better coverage and pricing for good risks, said Bain & Co. in a report on Monday.
But technology is advancing. will likely also increase the pressure on bad risks, resulting in sharply higher prices and unavailability of coverage, said Boston-based Bain & Co. In the report.
The insurer claims that payments can be reduced by up to 20% and operating costs by up to 50% because technologies such as automation and the Internet of Things enable insurance companies to become more efficient and better mitigate every risk event, Bain research found
This will create value for all parties involved and stimulate a collective change in the key parts of the industry.
But while technology and data analysis allow insurance companies to make profits in understanding, preventing and mitigating risks, poor risk will come under more pressure, Bain said.
favorable, as carbon-intensive energy producers can increase, Bain said.
"Depending on the extent of this trend, governments may intervene with stricter rules on data access and use, increased regulation of emissions practices, or increased use of allocated risk pools and public-private partnership ", the report states.