Unravelling the Orthodoxy: Andrew Land speaks to George Netherton of Oliver Wyman
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What is the “unbundling” trend reshaping the insurance industry?
Insurers have really struggled to really generate the benefits of scale. Insurers get complex very quickly as you add a product or add a market or add a channel and I think that's left them vulnerable to disruptive players saying where is their capital, light, high growth, revenue or opportunity for me to make a better product, solve a problem better.
Welcome to Orbit, the HG podcast series where we speak to leaders and innovators from across the software and tech ecosystem to discuss the key trends, the change, how we all do business. My name is Andrew Land. I'm a partner at HG, specializing in insurance, software and services. And I'm thrilled to be joined today by my fellow insurance head George Netherton, of strategy consultants Oliver Wyman, and George runs their European insurance practice. Thanks for coming along, George. Thank you for having me. Look, we're gonna talk today about unbundling, uh the unbundling of the insurance industry and it's a trend which um has really accelerated in the last few years. Um it seems to me that for decades you had a an aggregation of products uh into very large multi country insurance giants.
They would do the whole value chain. So Customer acquisition, product design, underwriting, servicing customers, claims management. And to some extent all parts of the sector were bundled up in a nicely wrapped package. And that package was normally had a label on it like an AXA or an Aviva. And that in insurance the conventional wisdom was that skill was good, the benefits of skill were obvious and so the bigger the better. And I think the trend that we've seen, which is fascinating, is that in the last sort of five to ten years, there's been a very rapid unbundling of this business model. So the various links in the value chain have been broken, smaller companies are emerging, and this trend seems to be driven partly by the growth in software and data.
So I'd like to kind of get into that and just understand how you see that unbundling development. And then also how you think it may play out in the coming years.
Insurers have really struggled to really generate the benefits of scale. And I think Insurers get complex very quickly. As you add a product or add a market or add a channel. It's very hard to drive real, real scalable economics out of a a a a kind of a solution cube that expands very rapidly across markets, products and channels. Um and that you know, the scale advantages around brand and around capital efficiency are there and are are well understood, but the operating efficiency of scale are are often negative for for big insurance carriers. And so they've they've struggled to to hoover up the the world in the way that they might. And I think that's left them vulnerable to um disruptive players saying where is their capital light high growth revenue or opportunity for me to make a better product solve a problem better and I think it has been within um within software and technology inside insurers but it's also where
individual innovators who in the past might have been stuck inside large insurance companies with the the costs and the benefits that that that brings them. Um they've been able to spin out, start an MGA, get a following, get capacity, get connected to distribution very quickly. Um as as distribution becomes more digital, an individual underwriter with a good idea and an MGA and a team can reach much more than they used to be able to when I had to be able to walk around the square mile with my folio and and hope somebody would would offer me a risk. Um so I think a a a lot of the change has been driven by just the the different value pools, the different economics, but also then opportunities for capital like growth by taking a transversal slice on on the sector and and driving growth that way.
So that yeah, that that that's interesting. And and I guess the MGA market is perhaps the best example of that unbundling where you've seen this explosion of very, very niche and very specific MGAs develop and thrive in this market.
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Chapters
8 chapters
1
What is the “unbundling” trend reshaping the insurance industry?
0:00–5:17
2
How are MGAs driving niche specialization and rapid growth?
5:17–9:32
3
Why is cyber insurance a prime example of insurance unbundling?
9:32–13:52
4
What role does digital distribution play in low‑cost personal insurance?
13:52–17:36
5
How are mutual and micro‑mutual models re‑emerging in insurance?
17:36–21:59
6
What can insurers learn from the faster‑unbundling of the banking sector?
21:59–26:53
7
How will the claims value chain evolve with drones and automation?
26:53–31:43
8
What does the next five years look like for a modernised insurance ecosystem?
31:43–35:44
Speakers
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