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Many associate the "Flat World" with globalization- but we think it's scope is much broader. If we focus solely on this narrow definition, we are likely to miss many of the negative opportunities that awaits us right around the corner!
The world is being flattened, but is not 100% flat as yet. It is being flattened by the convergence of four disruptive trends:
1. Structural shifts in global demographics: Large number of financially affluent individuals are rapidly shifting their mindset from wealth accumulation to wealth preservation. Increasing life spans are placing greater importance on "Making the money last". Products are being designed to blend guaranteed payments for life with inflation-hedging equity-based investments.
2. Access to technology: Over the past multiple years, insurance companies have seen an increasing usage of Internet technologies amongst their customers and equally importantly, their distributors. The impact has not yet been widespread of the Internet as a distribution channel, but rather as a service channel.
Fully leveraging the Internet as a communications and self-service medium will be essential if the insurance company of the future expects to relate the new generation of tech-savvy customers.
3. Opening of emerging economies: Emerging markets represent three distinct opportunities. First, they are an under served market with increasing prosperity and need to protect the growing wealth. Secondly, they represent significant growth opportunity with greater growth potential than in established economies. Finally, they are a source of cost-effective talent in areas such as underwriting, claims adjusting, actuarial science and accounting.
4. Accountability regulation: Regulators are placing increasing disclosure requirements and becoming far more sensitive to the vast expanse of personal data collected and maintained in insurance companies. Assuring that an individuals medical and financial information is protected is requiring extensive and costly changes to both processes and record keeping systems.
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