Market overview
Sampo Group operates in the P&C insurance markets in Finland, Sweden, Denmark, Norway, and the UK. The Group also has operations in the Baltics.
P&C insurance markets
Property and casualty insurance (or non-life insurance) is a collective term that is used for property insurance, liability insurance, reinsurance, and accident and sickness insurance.
In other words, it refers to insurance that protects against physical or economic damage. P&C insurance covers various risks and uncertain events that may cause damage to the property of an individual. Typical examples of P&C insurances include household, homeowner, motor, and accident insurance. Supplementary insurances include travel, marine, forest, and livestock insurance. When determining premium costs, the insurance companies must price in both known and unknown (emerging) risks, and also be able to price in these risks accurately in what is a competitive insurance market.
Megatrends in P&C insurance
Generative AI is transforming insurance processes by enabling faster decision-making and reducing manual errors. It is expected to deliver benefits across the value chain including improved customer engagement, better product design, augmented marketing, and by improving the accuracy of risk assessment and pricing. In addition, generative AI is anticipated to accelerate claims processing and reduce operational costs. Generative AI adoption is still in its early stages, and its application in claims processing and customer service is likely to become the first significant use case in the insurance industry.
Source: Capgemini 2024
As insurers increasingly leverage predictive analytics and real-time data from smart devices, risk assessment and pricing are becoming more precise and flexible. Real-time data, obtained through smart devices such as wearables and connected cars, enables more personalised solutions for customers as well as faster decision-making. This development enhances automation in insurance processes and reduces manual errors, leading to improved customer experiences and competitiveness. However, this progress also raises concerns about cybersecurity challenges, which become increasingly important to address as the use of smart devices expands.
Source: Capgemini 2024
The role of cloud services in the insurance industry is expanding rapidly. Cloud services enable flexible data management, scalable solutions, and fast deployment of new services. Insurance companies can leverage cloud platforms for customer data processing, risk assessment, and increased automation. This development streamlines operational processes, enhances customer experiences, and allows for the effective use of new technologies such as artificial intelligence and advanced analytics. However, widespread cloud adoption requires robust data security and clear operating models to ensure that customer information remains protected and that regulatory requirements are met. Cloud serves as a foundation for digital transformation and strengthens the competitiveness of insurance companies.
Source: Capgemini 2024
Insurance companies are refining risk assessment and pricing by returning to the fundamentals of underwriting and developing their processes to meet the complex risks of today. New technologies, such as artificial intelligence and extensive data sources, enable more accurate risk classification and portfolio management. This helps insurers respond to challenges like climate change, economic uncertainty, cyber risks, and regulatory demands. At the same time, there is a growing need for continuous process improvement and disciplined risk management to maintain insurability and profitability in a changing environment.
Source: Capgemini 2024
The use of digital twins gives insurance companies the ability to model asset risks and pricing with greater accuracy. Real-time and simulated data help identify risks, anticipate losses, and develop preventive solutions. Digital twins also speed up claims processes and enable more personalised insurance offerings. As the technology advances, the role of digital twins will become increasingly important, especially in managing complex and large-scale risks.
Source: Capgemini 2024
Nordic P&C insurance markets
The Nordic insurance market is in many ways a special market and it is considerably different from the rest of the European insurance markets. The Nordic P&C insurance market is relatively concentrated, which means that a fairly small number of major insurers have a large share of the Nordic P&C insurance market. Many insurance companies have developed inter-Nordic corporate structures. One reason for this is the goals of the insurance companies to derive benefits from the similarities that exist in the Nordic insurance markets and their regulatory frameworks.
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