Creating value, finding focus: Global Insurance Report 2022
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Creating value,
finding focus:
Global Insurance
Report 2022
This report is a collaborative effort by Pierre-Ignace Bernard, Stephan Binder,
Alexander D’Amico, Henri de Combles de Nayves, Kweilin Ellingrud, Philipp Klais,
Bernhard Kotanko, and Kurt Strovink, representing views from McKinsey’s Insurance Practice.
February 2022
Contents ii Introduction 01 Welcome to a new world 07 State of the industry 21 Strategic imperatives for insurers 27 Where to play: Focusing the portfolio
Creating value,
finding focus
Welcome to the first edition of McKinsey’s Global create more value for shareholders? Can they
Insurance Report, focused on challenges and unlock latent demand and improve the customer
opportunities for carriers in the global insurance experience? How can they regain momentum on
industry. In this report, we look back at the past the long-running quest to improve productivity?
year’s developments and ahead to the ways that Also, what about talent? How can they reimagine
the industry is evolving. the employee proposition to attract and retain
the brightest and best after the pandemic? Finally,
The global pandemic is resurgent with yet another
how can insurers, individually and collectively,
wave of rising case numbers and pressure on
reframe the role and purpose of insurance
healthcare systems. Its effects on business are no
in society?
less significant. Over the past two years, COVID-
19 has accelerated some trends that look certain To address these questions, we believe
to reshape the way insurance is underwritten, the leadership teams of insurance carriers need to
distributed, and managed. At the same time, some capitalize on nine value levers:
of the problems that have challenged the industry
1. Make environmental, social, and governance
over the past decade have not gone away, and
(ESG) considerations a core feature of
the complexity of the macroeconomic environment
the business model.
has increased. Revenue growth is limited in
most regions; intermediaries are capturing more 2. Regain relevance through product innovation
value; scale economies are proving elusive; and coverage of new risks.
and productivity is quite stagnant. As a result,
3. Enhance and personalize customer
economic profit—that is, profit after cost of
engagement and experience.
capital—in the insurance industry is practically at
a standstill. 4. Engage with ecosystems and insurtechs.
The industry’s problems are not lost on capital 5. Develop new businesses for the digital age.
markets. As public investors mark down
6. Scale impact from data and analytics.
companies’ shares, private investors swoop
in to acquire closed books, and some insurers 7. Modernize core technology platforms.
reconsider their geographical footprints,
8. Address the productivity imperative.
the fundamental structure of the industry is
coming into question. Insurers now face several 9. Reimagine culture, diversity, and ways of
fundamental strategic questions: How can they working to attract and retain talent.
ii Creating value, finding focus: Global Insurance Report 2022
Addressing these nine imperatives will help and breadth of footprint, a common strategic
carriers answer strategic questions about “how to thrust of the past decades for many insurers,
play.” But the challenges and recent trends facing yields to a more rigorous search for a company’s
the industry will force some insurers also to think true source of competitive advantage.
about “where to play,” to rebalance their portfolios
To form a strategy that addresses the challenges
of businesses, and to review their capital allocation
of this period of intense flux, carriers will need to
accordingly, in particular through M&A and asset
put focus and local scale at center stage. Insurers
disposals. At the end of this report, we focus on
that can develop a tightly defined business
this pressing question: Where should insurers be
model and take advantage of the trends and
active (in terms of geography, lines of business,
currents unleashed by the global pandemic can
and position in the value chain) to renew value
restart growth, expand performance on multiple
creation and themselves? The recent wave of sales
dimensions, and renew themselves through value
of noncore businesses to buyers with different
creation, securing an industry-leading position in
business models suggests that a secular change
the years to come.
may be in the works. We might be witnessing
a period when the quest for economies of scale
Where should insurers
be active to renew value
creation and themselves?
Creating value, finding focus: Global Insurance Report 2022 iii
In coming years, the global insurance industry will be profoundly shaped by some megatrends that have emerged and accelerated since February 2020. © Alexander W Helin/Getty Images
1
Welcome to
a new world
The past two years may have been the most
peculiar recession and recovery in living memory.
In 2020, the human tragedy of the COVID-
19 pandemic triggered a global economic
downturn that was initially sharper than the Great
Depression. As government support programs
took shape, the recession rapidly bottomed out,
leading to a strong economic recovery in 2021.
Global financial markets took a roller-coaster ride
as well.
The impact on the insurance industry was
noticeable: in 2020, premium growth slowed
to approximately 1.2 percent (compared with
more than 4 percent per year between 2010 and
2020). Profits fell by about 15 percent from 2019.
The decline was sharpest in Asia–Pacific (down
36 percent) and was particularly driven by falling
profits in life (Exhibits 1 and 2).
Preliminary data suggest that premium growth and
profits rebounded in 2021, especially in regions
where strong vaccine rollouts have made many
activities possible again, at least periodically.
Creating value, finding focus: Global Insurance Report 2022 1Exhibit 1
Premiumgrowth
Premium growth rebounded
rebounded in after
in 2021 2021slowing
after slowing
in 2020. in 2020.
Global insurance gross premiums written, $ billions1 Health P&C Life
4.0% p.a.2 CAGR, %
4.1% p.a. 2
5,987 2016–21
5,421 5,602 5,672
4,932 5,157
2,462 2,389 2,491 2
3,878 2,454
2,258 2,348
1,909
1,604 1,700 1,735 1,834 5
1,459 1,531
1,126
1,214 1,278 1,363 1,440 1,548 1,662 6
843
2010 2016 2017 2018 2019 2020E 2021E
Americas
5.5% p.a.2
4.7% p.a.2
2,541 2,761
2,185 2,310 2,442
2,116
633 635 693 4
1,606 580 569 607
489 810 828 905 6
691 726 759
531
845 890 944 999 1,078 1,164 7
586
2010 2016 2017 2018 2019 2020E 2021E
Europe, Middle East, and Africa
1.3% p.a.2 2.2% p.a.2
1,395 1,453 1,536 1,533 1,475 1,558 1
1,288
753 376 786 420 823 435 882 450 848 472 780 479 831 498 3
159 189 196 204 212 217 229
4
2010 2016 2017 2018 2019 2020E 2021E
Asia–Pacific
3.3% p.a.2
6.3% p.a.2
1,574 1,627 1,656 1,668
1,421 1,519 2
984 975 967
219 892 349 956 371 965 395 980 418 429 431 4
668 98 180 192 214 229 252 269
8
2010 2016 2017 2018 2019 2020E 2021E
Note: Figures may not sum, because of rounding.
1 Based on 2020 average fixed exchange rate.
2 Per annum.
Source: McKinsey Global Insurance Pools
2 Creating value, finding focus: Global Insurance Report 2022Exhibit 2
Industryprofits
Industry profits increased
increased in 2021
in 2021 after aafter
dip ina2020.
dip in 2020.
Global insurance after-tax profits, $ billions1 Health P&C Life
4.8% p.a.2 CAGR, %
4.8% p.a.2 392 2016–21
360
324 332
311
284 181
134 118 170 4
215 156
139
90
140 134
128
111 105 147 6
86
50 62 71 79
39 34 43 5
2010 2016 2017 2018 2019 2020E 2021E
Americas
4.6% p.a.2
3.1% p.a.2
167 152
144 142
113 120 49 20 1
94 39 43
24 41 47 70 71
43 49 41
62 75 9
28 24 32 42 49 60 23
–1
2010 2016 2017 2018 2019 2020E 2021E
Europe, Middle East, and Africa
4.3% p.a.2
4.7% p.a.2
121 114 126
78
103 104 92 4
56 65 61 68
41 32 57 40 5
4 40 5 42 6 46 7 49 7 45 7 51 8
10
2010 2016 2017 2018 2019 2020E 2021E
Asia–Pacific
6.1% p.a.2
8.1% p.a.2
88 88 104 91
25 68 67 7
43 11 22 53 22 55 21 67 21 18 59 21
41 37 –1
7 5 13 13 15 12 12
19
2010 2016 2017 2018 2019 2020E 2021E
Note: Figures may not sum, because of rounding.
1 Based on 2020 average fixed exchange rate.
2 Per annum.
Source: McKinsey Global Insurance Pools
Creating value, finding focus: Global Insurance Report 2022 3Megatrends in the it. The insurance industry has not escaped
post-COVID-19 world this trend, moving from a moderately value-
In coming years, the global insurance industry will creating industry to one that destroys value—
be profoundly shaped by some megatrends that and the trend is even stronger at the company
have emerged and accelerated since February level. Half of insurers globally are not earning
2020. Some are shifts in the macroeconomy; their cost of capital, and half are trading below
others are changes in competitive dynamics. book value.
The most dramatic may be changes in customer
— A potential anchoring of remote-interaction
and employer behaviors. While most of these
models with customers. The pandemic
trends are not completely new, they have
saw a “decade in days” acceleration in digital
accelerated during the pandemic. In aggregate,
uptake—for example, e-commerce sales in
they are shaping a new operating environment
the United States grew as much in the first
for insurers that is hugely disruptive and that
half of 2020 as in the previous ten years.2 Tech
challenges traditional ways of value creation.
players’ platforms strengthened their position
These trends, in brief, include the following:
as go-to places for customers. The frequency
— A decoupling of macroeconomic of interactions and the level of personalization
environments among Asia, Europe, and have dramatically changed, and insurers
North America, whether through elevated need to ensure they stay relevant and can
geopolitical and trade tensions or different craft truly personal, needs-based contextual
interest rate trends between regions. (For experiences. This situation will probably
example, while the situation remains highly provide tailwinds for insurtechs and other
ambiguous, the United States may be exiting digital attackers, raising the risk of disruption
the “low for long” rate environment on the back for incumbents. To fend off the threat, insurers
of a noticeable though perhaps transitory will need to make additional IT investments
spike in inflation). In areas where low rates to digitalize and automate their processes; if
continue to prevail, this could put even more the trend persists, they might even need to
pressure on life insurers to revamp their significantly modify their distribution models
business models accordingly. by repositioning the roles of agencies, brokers,
and digital sales channels.
— A dichotomy between ‘winners’ and ‘losers,’
reinforced by the crisis. The economic — An increased awareness of sustainability,
impact of the COVID-19 pandemic has varied climate change, and issues of diversity,
considerably by geography (for example, Asia, equity, and inclusion (DE&I). Corporates
Europe, and North America are recovering at and customers alike have become attuned to
different speeds); by sector (for example, travel a broader range of environmental and energy
and hospitality suffered a deep recession, issues, as well as situations of social, racial,
whereas e-commerce companies soared); and generational injustice. This will have
and within each sector (resulting in intense an immediate impact on insurers, particularly
M&A activity). The past two years have thus in their investment and underwriting portfolios,
reinforced the superstar phenomenon1 —the as governments set target dates to reach
growing concentration of economic success— net-zero emissions. In addition, natural
that we have observed not just among catastrophes abounded in 2020 and 2021,
companies but also in cities, economic sectors leaving insurers wondering whether these
such as insurance, and other aspects of patterns represent extraordinary activity
the global economy. Among the world’s largest or the new normal—in which case, they will
companies, economic profit is distributed need to examine whether their pricing models
unequally along a “power curve,” with the top adequately account for these events.
10 percent of firms capturing 80 percent of
1
For more, see “What every CEO needs to know about ‘superstar’ companies,” McKinsey Global Institute, April 2, 2019.
2
Arun Arora, Hamza Khan, Sajal Kohli, and Caroline Tufft, “DTC e-commerce: How consumer brands can get it right,” McKinsey,
November 30, 2020.
4 Creating value, finding focus: Global Insurance Report 2022Several megatrends are shaping
a new operating environment for
insurers that is hugely disruptive
and that challenges traditional
ways of value creation.
— New challenges to the purpose and about their role in a world increasingly
relevance of insurers. Just as the financial dominated by platform companies.
crisis of 2007–09 put the spotlight on
— A renewed focus on health and well-being
the banking industry, the pandemic and
and a greater interest in home nesting.
its associated insurance issues have put
The ongoing health crisis could leave a mark
the spotlight on the insurance industry. This
on consumers’ psyches for a generation and
might prompt insurers to rethink their societal
could inspire insurers to actively participate
purpose and relevance in the economy as
in health and protection ecosystems.6 At
a risk-taking industry. There is a perception
the same time, consumers are now hooked on
that the industry has lost this characteristic in
“home nesting,” or leisure activities at home
the past ten years by limiting the types of risks
(such as cooking, DIY projects, meditation,
or clients it covers (as seen in Europe, where
and streaming entertainment). According to
life insurance has moved sharply toward unit-
the McKinsey Global Institute, home nesting
linked products).
is one of the new behaviors most likely to
— A rethinking of mobility. Commercial aviation endureafter the pandemic.7 In response,
and other forms of travel fell sharply over insurers might invest in smart-home 8 services
the past two years; shared mobility3 and and offerings such as discounts on homes
micromobility4 fell, then resumed their steady equipped with devices that can detect fire,
rise. Next steps might include a rebalancing flood, or unwanted visitors.
among modes of transport; for example,
— The dawn of new ways of working. Almost all
COVID-19 habits might result in a continued
companies are trying to figure out new hybrid
preference for individual car use over public
working models9; so are many professions that
transport but also in less driving overall as
have close contact with customers. This will
people continue to work from home. This
have a huge impact on the insurance industry.
might encourage insurers to reexamine
Carriers will have to identify the skills required
their product offerings on severely affected
to manage remote and hybrid teams10 and
lines of business (such as life, travel, and
review their real estate needs—both to adjust
events) and to innovate. For example, they
to a changing workforce and to match clients’
might cover emerging mobility needs, make
new geographical footprints (for example,
new use of telematics, or engage in mobility
as people move to midsize cities, suburbs,
ecosystems 5—being thoughtful and realistic
and exurbs).
3
Lennart Andersson, Andreas Gläfke, Timo Möller, and Tobias Schneiderbauer, “Why shared mobility is poised to make a comeback after
the crisis,” McKinsey, July 15, 2020.
4
Kersten Heineke, Benedikt Kloss, and Darius Scurtu, “The future of micromobility: Ridership and revenue after a crisis,” McKinsey, July
16, 2020.
5
Insurance insights that matter, “A view from the Pacific Insurance Conference: How to create a successful insurance ecosystem,” blog
entry by Bernhard Kotanko, McKinsey, January 8, 2020.
6
“Digital health ecosystems: A payer perspective,” McKinsey, August 2, 2019.
7
For more, see “The consumer demand recovery and lasting effects of COVID-19,” McKinsey Global Institute, March 17, 2021.
8
“Digital ecosystems for insurers: Opportunities through the Internet of Things,” McKinsey, February 4, 2019.
9
Aaron De Smet, Bonnie Dowling, Mihir Mysore, and Angelika Reich, “It’s time for leaders to get real about hybrid,” McKinsey Quarterly,
July 9, 2021.
10
Insurance insights that matter, “Why insurers should embrace remote work,” blog post by Julie Goran and Tom Welchman, McKinsey,
April 21, 2021.
Creating value, finding focus: Global Insurance Report 2022 5Insurance barely earns its cost of capital, making investors skeptical. © Suzana Topita/Getty Images
2
State of the
industry
Old challenges still loom
Even before 2020, the insurance industry faced
challenges. Now, those issues have taken on even
greater urgency:
— Headwinds on revenue growth. Three
structural factors are challenging industry
growth (Exhibits 3 and 4): persistent low
interest rates, which pressure spread-based
businesses such as life insurance; pricing
pressures driven by fee transparency, digital
attackers, and lower-cost options—pressures
that in some markets are aggravated by price
comparison websites; and organic demand
that is growing only slowly in mature markets.
The latter is particularly worrying, because
growth in developed economies is coming
mostly from price increases rather than from
volume or new risks covered, highlighting
a risk that the industry might lose its relevance
over time.
Creating value, finding focus: Global Insurance Report 2022 7Exhibit 3
In life,
In life,revenue
revenue growth
growth in much
in much of theof the isworld
world is subdued.
subdued.
Global revenues by life insurance product and region, 2021E
Gross direct domestic premiums written (GDDPW), $ billions1
Difference between premiums 2021 GDDPW Growth rates 3 ppt³
and GDP growth,2 ppt3
Individual Individual Individual
term life endowments annuities Unit-linked Group life Total
40 118 140 109 224 630
North America 0.5 –2.9 3.7 –5.7 0.9 –0.7
26 238 72 175 240 749
Western Europe –0.3 –2.3 –2.9 2.7 –2.1 –1.2
9 212 210 34 20 484
Emerging Asia –6.9 –9.9 16.2 0.8 –5.9 –1.4
95 231 45 47 66 483
Developed Asia –1.2 –3.5 –9.6 –3.5 –2.7 –3.7
7 2 4 39 11 62
Latin America 0.3 1.9 –13.0 0.9 –1.5 –0.8
3 18 3 15 21 59
Africa and Middle East –1.6 –1.6 –0.6 –0.8 –1.3 –1.2
2 5 1 11 4 22
Eastern Europe –1.8 –2.9 –2.8 0.5 –4.6 –1.5
181 824 473 428 584 2491
Total –3.0 –5.6 3.5 –2.1 –2.9 –2.7
Note: Figures may not sum, because of rounding.
1 Based on average fixed exchange rate.
2 Growth in nominal premiums and GDP, 2016–21.
3 Percentage points.
Source: McKinsey Global Institute; McKinsey Global Insurance Pools
Exhibit 4
In nonlife, North America has been the highest-growth region compared to
In
GDPnonlife, North years.
in recent America has been the highest-growth region compared to GDP in
recent years.
Global revenues by nonlife insurance product and region, 2021E
Gross direct domestic premiums written (GDDPW), $ billions1
Difference between premiums 2021 GDDPW Growth rates 3 ppt³
and GDP growth,2 ppt3
Fire and Other
Motor property Liability Accident P&C Health Total
North America 339 245 214 14 43 1,147 2,002
0.9 2.6 1.0 –0.9 1.9 2.6 2.1
Western Europe 151 109 35 50 58 204 608
0.3 1.3 1.7 0.8 1.6 1.6 1.2
132 15 16 20 44 134 361
Emerging Asia 7.6
–5.1 –0.4 13.7 1.7 4.9 1.2
Developed Asia 85 35 17 43 25 135 339
0.2 2.9 3.2 2.8 –3.2 1.8 1.3
21 12 3 7 8 17 67
Latin America –2.7 2.5 3.7 3.1 4.6 1.5 0.8
Africa and Middle East 27 9 3 3 9 21 72
–1.1 1.0 2.0 –0.1 4.2 2.0 0.8
Eastern Europe 22 9 3 5 3 4 47
–2.3 –2.5 –4.2 9.8 –1.7 –3.8 –1.5
Total 777 434 291 142 190 1,662 3,497
–1.1 0.9 0.7 0.2 0.9 1.8 0.8
Note: Figures may not sum, because of rounding.
1 Based on average fixed exchange rate.
2 Growth in nominal premiums and GDP, 2016–21.
3 Percentage points.
Source: McKinsey Global Institute; McKinsey Global Insurance Pools
8 Creating value, finding focus: Global Insurance Report 2022— An ongoing ‘fight for the customer.’ — A value shift toward intermediaries. Over
Insurtechs are driving digital innovation and the past five to ten years, brokers have
disruption in the industry,11 with investments emerged as the clear winners of the industry,
in insurtechs worldwide growing from with both public and private investors
$1 billion in 2004 to $7.2 billion in 2019 to recognizing their position of strength in
$14.6 billion in 2021. More than 40 percent the insurance value chain (Exhibit 6). Total
of insurtechs are focused on the marketing shareholder returns are much higher for
and distribution segments of the insurance brokers than for other industry segments, and
value chain (Exhibit 5), enabling them to private-equity firms are investing.12 In 2019,
solve customer pain points through a digitally for example, CVC Capital Partners invested in
enhanced client experience that could pose April, and GTCR invested in AssuredPartners.
a competitive threat to incumbents. And while PE-backed brokerage deals completed in
some of these players have seen their share the United States accounted for roughly
price tumble since their IPOs, we believe that three-quarters of all insurance transactions
a distinctive digital customer experience—from from 2016 to 2019. Because insurers do not
attackers or incumbents—will be a prerequisite control their distribution channels as tightly as
for industry-beating growth. And beyond other financial sectors (though it depends on
distribution, superior technology and healthy the region and line of business, as illustrated in
margins in insurance service businesses will Exhibit 7), they might run an even greater risk
challenge the traditional approach of many of becoming pure balance-sheet providers,
insurers to own the whole value chain—they while intermediaries keep an asset-light client
will be forced to form partnerships or make relationship model. The shift toward digital is
outsize investments to keep up. perhaps the last chance for insurers to regain
the upper hand in this “fight for the customer.”
Exhibit 5
Insurtechs
Insurtechs areare concentrated
concentrated in marketing
in marketing and distribution.
and distribution.
Insurtechs by product and business activity, % of database total1 10%
Products
P&C: Motor P&C: Other2 Health Life
Product
development 2 5 2 2
Marketing and
distribution 8 21 7 7
Pricing and
underwriting 3 6 2 2
Value
chain Policy
management 2 5 2 2
Claims 3 6 2 1
Other3 1 4 2 2
Note: Overlaps exist because some insurtechs provide solutions for multiple P&C subproducts and operate across multiple value chain components.
1 Insurtech database includes ~2,000 profiles as of 2020.
2 Including accident, fire and property, liability, and other P&C insurance.
3 Includes IT, HR, finance, and other support functions.
Source: McKinsey Global Insurance Pools; McKinsey insurtech database
11
Tanguy Catlin, Simon Kaesler, Alex Kimura, and Pradip Patiath, “Global perspectives on insurtechs,” McKinsey, September 30, 2021.
12
Ramnath Balasubramanian, Grier Tumas Dienstag, Katka Smolarova, and Ruxandra Tentis, “The insurance trends private-equity
investors should understand in 2021,” McKinsey, August 20, 2021.
Creating value, finding focus: Global Insurance Report 2022 9Brokers
Exhibit 6 and North American insurers produced the best returns in the past
decade.and North American insurers produced the best returns in the past decade.
Brokers
Annualized TSR by line of business, %
2010–19 2020–21
Global brokers 21.9 53.4
Reinsurers 14.9 –4.4
P&C 12.7 19.8
Multiline 9.8 14.9
Life and health 9.7 7.0
Annualized TSR by geography, %
North America 15.6 25.1
Europe, Middle
East, and Africa 8.7 –0.2
Asia–Pacific 4.9 –3.4
Note: The following sectoral indexes have been considered: Refinitiv Global Reinsurance Index, S&P Global 1200 Insurance Brokers TR Index, S&P Global 1200
Life & Health Insurance TR Index, S&P Global 1200 Multiline Insurance TR Index, S&P Global 1200 Property & Casualty Insurance TR Index, STOXX Asia/Pacific
600 Insurance Index, STOXX Europe 600 Insurance Index, STOXX North America 600 Insurance Net Return Index.
Source: Bloomberg; Capital IQ; Refinitiv Eikon
Exhibit 7
Distribution
Distribution channels
channels differ
differ by geography
by geography and lineand line of business.
of business.
Gross premiums written by Dominant Tied agents and branches Bancassurance
distribution
distribution channel, 2015–20, % channel Brokers Direct and other
Americas Europe, Middle East, and Africa Asia–Pacific
Life regional total Delta Life regional total Delta Life regional total Delta
2015–20 2015–20 2015–20
29 27 –2 22 23 1
15 16 1 48 53 5
49 52 3 9 11 2
61 59 –2 36
11 9 –2 27 –9
11 12 1 3 3 0 6 9 3
2015 2020 2015 2020 2015 2020
P&C regional total P&C regional total P&C regional total
33 29 –4 29 31 2
58 53 –5
43 46 3
58 59 1
24 27 3 3 1 –2
0 0 0 8 9 1 26 22 –4
9 11 2 10 11 1
2015 2020 2015 2020 2015 2020
Note: Figures may not sum to 100%, because of rounding.
Source: McKinsey Global Insurance Pools
10 Creating value, finding focus: Global Insurance Report 2022— Elusive economies of scale. Many segments an opportunity for a value-creating wave of
of the insurance industry have been seeking local consolidation in the industry.
scale in recent years. In North America, for
— Limited productivity improvement. Though
example, increased scale was a primary
many insurers have undertaken cost savings
goal for 60 percent of recent acquisitions.13
programs, the aggregate results have not
The results have been meager: globally, scale
been fruitful. Industry-wide, productivity
does not seem to be producing higher ROE
improvements have been limited.14 Exhibit 11
(Exhibit 8). It turns out that trying to achieve
offers an illustration: between 2014 and 2019,
scale on a global level has been a recipe for
expense ratios fell for only 45 percent
becoming average.
of global P&C carriers (with important
Importantly, this does not hold true for local or variations across regions). For many, ratios
national scale effects; on these levels, scale is did not budge or actually rose. That’s
correlated with profitability (Exhibit 9). a disappointing outcome for an industry that
has communicated so much on the need for
The fragmentation of the industry in several
productivity improvements.
countries (Exhibit 10), coupled with this
scale effect at the local level, could present
Exhibit 8
Thereisislittle
There little evidence
evidence of global
of global scale effects.
scale effects.
Return on equity and assets for listed and nonlisted insurers, 2016–20, n = 630 insurers worldwide
Average ROE
2016–20, %
50
R2 = 0.0007
45
40
35
30
25
20
15
10
5
0
0 200,000 400,000 600,000 800,000 1,000,000
Average assets (2016–20)
$ millions
Source: Capital IQ; Company annual reports; SNL Financial
13
“A better approach to M&A in North American insurance,” McKinsey, March 9, 2021.
14
“The productivity imperative in insurance,” McKinsey, August 14, 2019.
Creating value, finding focus: Global Insurance Report 2022 11Exhibit 9
Scaleeffects
Scale effects
cancan occur
occur within
within local
local and and national
national markets. markets.
Return on equity and assets for life insurers in Italy, 2016–20, n = 24 insurers
Average ROE
2016–20, %
25
R2 = 0.150
20
15
10
5
0
0 20,000 40,000 60,000 80,000 100,000 120,000
Average assets (2016–20)
$ millions
Return on equity and assets for P&C insurers in China, 2016–20, n = 35 insurers
Average ROE
2016–20, %
25
R2 = 0.231
20
15
10
5
0
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000
Average assets (2016–20)
$ millions
Source: McKinsey Global Insurance Pools
12 Creating value, finding focus: Global Insurance Report 2022Exhibit 10
Marketshare
Market share is highly
is highly fragmented
fragmented in several
in several countries.
countries.
Domestic business of all players in markets
Largest 2nd largest 3rd largest 4th largest 5th largest Other
Life insurance market share of top 5 Top 5 market share,
insurers by premiums, 2020, % life, 2020, %
Developed Germany 28 8 7 4 4 49 51
markets
Canada 22 19 18 12 5 24 76
United Kingdom 17 16 10 10 7 40 60
Japan 16 11 9 7 7 50 50
France1 16 11 9 9 7 49 51
Switzerland 41 11 10 8 6 23 77
Italy 18 17 15 11 5 35 65
United States 7 6 6 6 5 72 29
Emerging Mexico 16 15 14 11 11 34 66
markets
India 64 8 6 6 3 13 87
Indonesia 13 13 11 8 6 50 51
China 2 28 25 11 7 7 23 77
Nonlife insurance market share of top 5 Top 5 market share,
insurers by premiums, 2020, % nonlife, 2020, %
Developed Germany 13 8 7 6 6 60 40
markets
Canada 15 9 7 7 7 55 45
United Kingdom 11 9 9 8 6 57 43
Japan 15 15 11 8 6 45 55
France1 17 13 10 9 7 44 56
Switzerland 13 12 10 7 7 50 50
Italy 21 15 12 6 6 41 59
United States 10 5 4 4 4 73 27
Emerging Mexico 14 11 11 6 5 53 47
markets
India 14 8 7 7 6 57 43
Indonesia 8 8 7 6 5 67 33
China2 40 25 12 7 5 10 90
Note: Figures may not sum to 100%, because of rounding.
1 France life comprises life insurance and capitalization; nonlife comprises P&C excluding accident.
2 Based on 2019 data.
Source: McKinsey Global Insurance Pools
Creating value, finding focus: Global Insurance Report 2022 13Exhibit 11
ManyP&C
Many P&Cinsurers
insurers have
have struggled
struggled to reduce
to reduce costs. costs.
Distribution of changes in P&C insurance expense ratio 2014–19,¹ %
Global, n = 858 Reduced ratio Increased ratio
25%
18% 16% 18%
11% 12%
3 ppt
Americas, n = 672
23%
19% 17% 19%
10% 12%
3 ppt
Europe, Middle East, and Africa, n = 62
24% 26%
18%
15%
10% 8%
3 ppt
Asia–Pacific, n = 124
45%
17%
10% 9% 11%
8%
3 ppt
1 Changes in expense ratios are expressed as percentage point (ppt) difference, 2014–19.
Source: McKinsey Global Insurance Pools
14 Creating value, finding focus: Global Insurance Report 2022Insurance barely earns its cost of
capital, making investors skeptical
After decades of stable Together, these elements explain the industry’s
limited value creation recently. Exhibit 12 shows
returns, insurance is the “power curve” distribution15 of economic profit
of every sector in the economy. Not only has
now a value-destroying
the overall insurance industry destroyed value in
the past years, but its positioning has eroded from
industry in which half
2005–09 to 2015–19 (with insurance brokers as
the exception).
the players do not earn Looked at another way, industry average ROEs
have remained at or slightly below the cost of
their cost of equity.
equity over the past years, notably in North
America and Western Europe (Exhibit 13).
15
Alex D’Amico, Mei Dong, Kurt Strovink, and Zane Williams, “How
to win in insurance: Climbing the power curve,” McKinsey, June
18, 2019.
Exhibit 12
Insurance
Insurance has hadhad
has negative economic
negative profit inprofit
economic recentin
years.
recent years.
Economic profit earned by an average company in 96 industries,1 $ millions
2005–09
3,000 Insurance Multiline
brokers insurance
2,000
Property
1,000 Life and health and casualty
insurance insurance Reinsurance
0
–1,000
–2,000
–3,000
2015–19
3,000
2,000
1,000
0
Life and health Multiline Property Insurance
–1,000 insurance insurance and casualty brokers
insurance
–2,000 Reinsurance
–3,000
1 Based on the 2,689 largest companies globally where sufficient data are available; including financial institutions and private companies; excluding real estate
and real estate investment trusts.
Source: S&CF Insights; S&P Global; McKinsey Corporate Performance Analytics
Creating value, finding focus: Global Insurance Report 2022 15Exhibit 13
Economic
Economic profitability
profitability has has slumped
slumped in several
in several regions. regions.
Insurers’ ROE by region, 2011–21E, % Average ROE, Average COE,1
2021, % 2017–21, %
Eastern Europe Developed Asia North America
Western Europe Emerging Asia Africa and Middle East
20
17.6 13.3
17.2 10.3
15
10 10.0 12.4
9.2 11.5
7.3 10.2
5 5.7 13.0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021E
1 Cost of equity.
Source: Bloomberg; McKinsey Global Insurance Pools
This is not a problem caused by a few which half the players do not earn their cost of
underperformers. Rather, it is industry-wide: equity. What can insurers do to beat the odds
54 percent of listed insurers, representing and emerge from the current environment as
52 percent of the global industry’s equity, winners? Our research16 across insurance and
had an ROE below their cost of equity over other sectors has found that five bold moves,
the past five years (Exhibit 14), raising questions pursued persistently, can propel players up
about the long-term economic viability of their the power curve: dynamically reallocate capital
business model. among businesses; reinvest a substantial share
of capital into organic growth and innovation;
Not surprisingly, investors in the public markets
pursue thematic and programmatic M&A (but not
have taken note. Worldwide, about 50 percent
megadeals); enhance underwriting margins; and
(depending on region and lines-of-business focus)
make game-changing improvements to achieve
of listed insurance companies have consistently
top-quartile productivity. All of this has to be
traded below their book value over the past
done in a very different and rapidly changing
five years (Exhibit 15). This is clearly a vote of no
environment, and starting points vary greatly
confidence in the industry and raises questions
among geographies and lines of business.
about the long-term future of several players as
stand-alone entities—particularly in multiline, To acknowledge these differences and capitalize
where about 60 percent of players are trading on the tailwinds of change outlined above, we
below book value. have identified nine levers that insurers can pull to
improve value creation.
In summary, after decades of stable returns,
insurance is now a value-destroying industry in
16
Chris Bradley, Martin Hirt, and Sven Smit, “Strategy to beat the odds,” McKinsey Quarterly, February 13, 2018.
16 Creating value, finding focus: Global Insurance Report 2022Exhibit 14
Morethan
More thanhalf
halfof of insurers
insurers globally
globally do notdo not
earn earn
their their
cost cost of equity.
of equity.
Distribution of average ROE minus average cost of equity (COE), 2017–21, % Listed players, n = 299
54% oflessinsurers earn
than COE 46% ofmoreinsurers earn
than COE
Number of 25%
insurers, 23%
%
17%
12%
11% 11%
5 ppt
Note: Figures may not sum to 100%, because of rounding.
1 Percentage points.
Source: McKinsey Global Insurance Pools
Creating value, finding focus: Global Insurance Report 2022 17Exhibit 15
Morethan
More thanhalf
halfof of insurers
insurers havehave been trading
been trading below
below book book value.
value.
Insurers’ price-to-book (P/B) ratio and proportion Insurance P/B Percentage of insurers
trading below book value, 2016–21, % trading below book value
World (n = 251)
1.5
1.01
1.0
59% 52%
45% 49% 50%
0.5 40%
0.0
2016 17 18 19 20 2021
Americas (n = 88) Europe, Middle East, and Africa (n = 116)
1.5 1.41 1.5
1.05
1.0 1.0
60% 53% 54%
51% 46% 52% 49%
0.5 36% 36% 42% 42% 0.5 43%
0.0 0.0
2016 17 18 19 20 2021 2016 17 18 19 20 2021
Asia–Pacific (n = 47) Life (n = 66)
1.5 1.5
0.58 0.65
1.0 1.0
62% 68% 62% 70%
60% 53% 56% 56% 61% 56%
40% 45%
0.5 0.5
0.0 0.0
2016 17 18 19 20 2021 2016 17 18 19 20 2021
P&C (n = 132) Multiline (n = 53)
1.42
1.5 1.5
0.72
1.0 1.0
64% 62% 68% 62%
58% 58%
50% 46%
0.5 34% 39% 40% 0.5
30%
0.0 0.0
2016 17 18 19 20 2021 2016 17 18 19 20 2021
Source: Bloomberg; Capital IQ
18 Creating value, finding focus: Global Insurance Report 2022© Suzana Topita/Getty Images
What can insurers do to beat the odds and emerge from the current environment as winners? © imageBROKER/Luca Renner/Getty Images
3
Strategic
imperatives
for insurers
So far we have sketched the trends and challenges
buffeting the industry. Their effects run so
deep that insurers now face some fundamental
strategic questions:
— How can we improve shareholder
value creation?
— How can we unlock latent demand and improve
customer experience?
— How can we overcome
stagnating productivity?
— How can we reimagine the employee
proposition to attract and retain talent post-
COVID-19?
— How can we frame the industry’s wider
purpose and role in society?
Creating value, finding focus: Global Insurance Report 2022 21Answering these questions is an urgent and Risks are rapidly evolving. In P&C commercial
broadly transformational task. In our view, it lines, for instance, data and cybersecurity risk
can be best accomplished by taking action on and machine-learning liability are coming to
the following nine imperatives: the fore. New risks call for new products and
a reallocation of priorities, and they represent
— Make environmental, social, and governance
significant opportunities for P&C and life
(ESG) considerations a core feature of
insurers that are willing to innovate. Such firms
the business model. ESG issues increasingly
are taking three steps: making their products
affect how all companies do business. More
modular, reallocating capital between
and more companies and their investors
personal and commercial lines, and moving
are recognizing ESG as a strategic priority
quickly to establish strong market positions in
that involves significant business risks and
the new risks.
opportunities. In interactions with many
stakeholders, including at annual general As noted, climate risk will require product
meetings of publicly listed insurers, ESG has innovation. But even more innovation is
become a major theme. necessary as the insurability of entire regions
may come into question.18 As our colleagues
But ESG is often used as a catchall term
have written, “The P&C industry can address
covering many topics; for any given company,
this issue by forming an industry-wide
just a handful of those topics will be of
coalition and collaborating more closely with
supreme importance. As an illustration,
governments and regulators.”19 At the very
consider climate risk, an area in which
least, requiring customers to opt out of
evidence is mounting that P&C insurers will
protection, rather than the current model
soon need to revisit their business models.17
of opting in, could substantially increase
However, while many insurers have begun
insurance penetration, as behavioral
to incorporate climate-risk considerations
science has shown. This raises the issue
in their investment processes, new-product
of affordability; on that front, rather than
launches and underwriting processes are
artificially suppressing risk-based rates,
mostly unchanged. With climate risk mounting,
governments and insurers might need stronger
insurers have an opportunity to broaden
public–private partnerships, including
the relevance of the industry’s traditional risk
government insurance voucher programs to
transfer to explicitly address risk mitigation.
address affordability issues without losing
Five simultaneous actions can make this
the highly valuable pricing mechanism
happen: stress-test total exposure against
that signals risks back to the insured (for
projected climate hazards; build resilience
example, to prevent building in areas with high
and rebalance portfolios; help organizations
flood risk).
mitigate climate risk; create innovative
products to address climate-related risk; and — Enhance and personalize customer
revise investment strategies. engagement and experience. New customer
behaviors require a shift in distribution.
— Regain relevance through product
Consumers are embracing digital channels and
innovation and coverage of new risks.
have become used to delightful experiences
While the insurance industry has improved its
with leading tech companies. They expect
resilience and solvency in recent years, some
the same when buying insurance both online
substantial risks have been left uninsured.
and offline. A seamless, consistent “multi-
A fast-changing world is creating many
access” experience20 in every channel is now
new and evolving risks—cyberrisks, climate
the gold standard for insurers. At the same
change, pandemics, intangible assets—that
time, most customers still expect some form of
remain underinsured, while other risks have
advice on most products. Addressing customer
been gradually transferred to governments
needs and improving customer experience
to handle.
thus does not necessarily mean going direct.
It might mean supporting distributors with
17
“Climate change and P&C insurance: The threat and opportunity,” McKinsey, November 19, 2020.
18
Sylvain Johansson, Andy Luo, Erwann Michel-Kerjan, and Leda Zaharieva, “State of property and casualty insurance 2020,” McKinsey,
April 22, 2020.
19
Ibid.
20
Simon Kaesler, Michael Krause, and Johannes-Tobias Lorenz, “The multi-access (r)evolution in insurance sales,” McKinsey, April 1, 2020.
22 Creating value, finding focus: Global Insurance Report 2022seamless, digital customer journeys that and organizational foundations as well as
let customers decide which topics they can the necessary partnerships to generate
access digitally themselves and on which value from their ecosystem approaches. Our
topics they value personal advice (for example, conversations with insurance executives
before buying a complex and low-frequency around the world suggest that leading carriers
product or in the case of a severe claim). take a three-stage approach22 to participating
in or forming an ecosystem: strategize,
Major European and US carriers have not
enable, and generate value. These stages
moved as quickly as some players in Asia that
can help insurers implement ecosystems in
have seamlessly linked their digital platforms
manageable, focused phases.
and tied agent channels and invested in
customer personalization and engagement. — Develop new businesses for the digital age.
Carriers willing to launch this journey could Private investors have spotted the potential
follow different approaches based on their for improvement and the not-too-distant
strengths and organizational capabilities. Many prospect of attractive returns in insurance.
insurers that traditionally rely on agents start They are investing heavily in insurtechs, whose
by providing digital tools to agents. Insurers attractive talent pools can rapidly create and
that depend on direct distribution are typically scale new businesses.
far down the road of digitalization; they can
In this context, incumbent carriers must
augment direct channels with tools to connect
reinvent their business models to fulfill
customers with people. Carriers that rely on
the imperative to grow and, ultimately, to
both an agent network and direct channels
deliver stakeholder value. As our colleagues
can build a true multi-access model that fully
wrote recently, “New-business building is
integrates both agent and direct channels.
emerging as a crucial strategic priority to drive
— Engage with ecosystems and insurtechs. reinvention and innovation for the industry.
The ongoing drive toward digitalization has Part of the reason is speed: what used to take
also put the insurance industry on the verge years must now be done in months or weeks
of a paradigm shift: as traditional industry to meet changing demands of the market.
borders fall away, ecosystems will greatly Insurance executives must shift how they lead
influence the future of insurers, with insurtechs their institutions—from a methodical pace
aiming to play a role in this recomposition of of change to the decisive reinvention of their
the value chain. Our research suggests that businesses. Many established companies
ecosystems could encompass $60 trillion in have tried and failed to build new businesses
revenue by 2030.21 from scratch. The ones that succeed combine
the speed of a start-up with the scale and
Many insurance executives are looking at
resources of the core business.”23
ways to engage with emerging ecosystems
in areas such as mobility, healthcare, Organizations that repeatedly build successful
and the connected home. While only new businesses exhibit six characteristics:
the very largest insurers will be able to strong commitment from senior management,
create or orchestrate their own ecosystems, obsession with value over ideas, a test-and-
the ability to connect with ecosystems will learn culture, “open architecture” capabilities,
be a prerequisite for growth for all carriers as balance between organizational freedom and
these systems gain in scale and customers corporate support, and dynamic performance
come to expect insurance products as part of management and measurement. To get
the offering. started on new-business building, insurers
can look for opportunities that simultaneously
Carriers will need to take a close look at their
meet customer demands, square with
relationships with end customers in the context
the organization’s strengths, and are sizable
of purchasing journeys—such as buying a car,
enough to create real value.
going on vacation, and buying a home—and
decide how to embed solutions and services — Scale impact from data and analytics. Most
alongside insurance coverage. To succeed, insurance executives would agree that data
insurers need to build the technological and analytics capabilities are becoming table
21
Miklos Dietz, Hamza Khan, and Istvan Rab, “How do companies create value from digital ecosystems?,” McKinsey, August 7, 2020.
22
“Ecosystems and platforms: How insurers can turn vision into reality,” McKinsey, March 12, 2020.
23
Ari Libarikian and Kurt Strovink, “CEO brief: The future of business building in insurance,” McKinsey, June 2, 2021.
Creating value, finding focus: Global Insurance Report 2022 23stakes in the P&C and life sectors in Europe, even more advanced technologies to
North America, and Asia.24 Leaders see enhance decision making and productivity,
enormous potential in best-in-class data and lower costs, and optimize the customer
analytics capabilities across the value chain, experience: as AI becomes more deeply
even for the highest-performing companies. integrated25 in the industry, carriers need to
For example, even the leading P&C insurers understand the potential for AI to reshape
can see loss ratios improve three to five claims, underwriting, pricing, and distribution.
points, new business premiums increase With this understanding, they can build
10 to 15 percent, and retention in profitable the skills and create the culture needed for
segments jump 5 to 10 percent. However, an AI-powered future.
after years of investing and experimenting,
— Modernize core technology platforms.
most insurers have not yet seen the return on
From 2012 to 2020, technology’s average
their investments at the enterprise level. While
share of operating costs rose by 36 percent
individual pilots are successful, they realize
for P&C and 10 percent for life. The key driver
the real challenge is in scaling the impact to
is increasing digitalization—at both the front
the whole organization. We call this the pilot
end, where technology enhances the customer
trap; to escape it, insurers need to move
experience, and the back end, where digital
analytics from experiments to the mainstream.
drives productivity gains and operational
This move requires a combination of distinctive performance. Digitalization is straining legacy
analytics, tools, frontline and management systems, some of which are decades old, and
routines, and investments in talent and many insurers are considering a replacement
capability building. The ideal mix of these of core systems with tech platforms that
elements will vary by line of business. Based support the requirements of the digital age.
on our experience with similar efforts, getting The challenge is that such projects can take
a few things right often determines whether five to ten years, and they often last longer
companies achieve their full potential. One and cost more than expected. Insurers
principle is to start small to learn and build need to clearly pinpoint the real business
conviction—for example, by picking two lines requirements, quantify the effects, and
of business, one with strong performance then identify the tech changes required to
and another that is performing less well, to achieve them. A wholesale change of all core
prove impact. “Big bang” efforts made without systems is not always the right answer, and
examples of the potential outcome often the long timeline of such a change can prevent
fail to drive change. Another guideline: keep carriers from adjusting to rapidly changing
the effort anchored in the C-suite; delegating market conditions.
down can dilute long-term aspirations. Carriers
To reach the next normal of core technology,26
should also focus on the pace of execution:
carriers will need to take three bold actions:
in other words, speed is a strategy, especially
reimagine the relationship between the IT
in the next 18 to 24 months, given evolving
group and other business functions, reinvent
market conditions. Fourth, carriers should
the ways that IT delivers products and services
engage the front line throughout the effort
to internal customers, and anticipate the future
to help ensure lasting change; adoption by
requirements of technology systems to provide
users is the foundation for success. Finally, it’s
the organization with essential capabilities (but
a good idea to link capital allocation decisions
without necessarily undertaking a complete
to the latest market intelligence and insights
change of the IT stack).
(at a high enough frequency to ensure you can
react to market shifts). — Address the productivity imperative. In
the current conditions, addressing structural
At the same time, technology is evolving
expenses27 has become an even more
quickly. The next level will be to leverage
important source of value—especially given
24
Kia Javanmardian, Sirus Ramezani, Ashish Srivastava, and Cameron Talischi, “How data and analytics are redefining excellence in P&C
underwriting,” McKinsey, September 24, 2021.
25
Ramnath Balasubramanian, Ari Libarikian, and Doug McElhaney, “Insurance 2030—The impact of AI on the future of insurance,”
McKinsey, March 12, 2021.
26
Krish Krishnakanthan, Ani Majumder, Björn Münstermann, and Peter Braad Olesen, “Reaching the next normal of insurance core
technology,” McKinsey, July 2, 2020.
27
Alex D’Amico, Kweilin Ellingrud, Daniel Garza, and Nancy Szmolyan, “The productivity imperative for US life and annuities carriers,”
McKinsey, March 16, 2021.
24 Creating value, finding focus: Global Insurance Report 2022the limited progress to date. Total expenses colleagues summed it up recently: “Once in
relative to total revenues (including investment a generation (if that), we have the opportunity
income) increased by 20 percent from 2003 to to reimagine how we work. In the 1800s,
2019 for the life and annuities industry and by the Industrial Revolution moved many in
6 percent for P&C insurance carriers. During Europe and the United States from fields to
these same years, automakers and telecoms factories. In the 1940s, World War II brought
companies successfully reduced their total women into the workforce (if not the C-suite)
expense ratios by 15 percent or more.28 at unprecedented rates. In the 1990s,
the explosion of PCs and email drove a rapid
Insurers need more than mere piecemeal
increase in productivity and the speed of
attempts at improvements. Only
decision making, ushering in the digital age as
a transformative approach29 will allow
we know it today. And in 2020, the COVID-19
an insurer to survive and thrive in a post-
pandemic drove employees out of offices to
COVID-19 world. Each carrier is unique, but
work from home. ... The return to the workplace
any company can begin the process to improve
is a chance to create a new, more effective
productivity by establishing the trajectory
operating model that works for companies
and full performance potential of the business
and people navigating a world of increasing
across the value chain—including sales and
uncertainty. There is, however, one big catch:
distribution, product development, operations,
employers must confront the broadening
technology, and corporate functions.
disconnect between how they and their
With a clear vision, insurers can write employees see the future.”30 Because of this
a comprehensive and detailed plan with clear, disconnect, a record number of employees
measurable goals and assign responsibility to are quitting or thinking about doing so (the
specific executives. Financial, operational, and so-called Great Resignation). 31
customer-experience targets are all in scope.
Many companies don’t really understand why
Examples include straight-through processing
their employees are leaving. Without knowing
rates and all-digital policy application and
the true causes of attrition, companies
issuance rates in underwriting. Without both
sometimes offer pay raises and bonuses that
clear goals and accountability, transformations
fall flat. Rather than sensing appreciation,
often deliver poor results.
employees sense a transaction. Leaders need
To do the work, insurers should build a team to start from scratch, question everything, and
to continually and logically sequence all make changes to the working model based on
the improvement initiatives so that every part the evidence.
of the organization knows what to do and
There is no road map or playbook for this
when to do it in a harmonized way. A senior
unprecedented time. Experimentation will be
executive should lead the team, holding people
key. Carriers can try different working models
accountable for their actions and their results.
and norms, physical-space layouts, and tools
The keys to success of such a productivity
in service of a future that balances productivity
transformation are top-management
with creativity, personal flexibility with team
conviction, leadership to challenge prevailing
collaboration, and the office with the home.
orthodoxies and drive step-change
That means experimenting and piloting as
performance improvements, and a rigorous
individuals, teams, business units, offices, and
execution machine that ensures delivery (and,
organizations. Letting experiments play out is
where required, adaptation) of initiatives.
not easy for many leaders. A clear solution may
— Reimagine culture, diversity, and ways of not be immediately apparent—the big answers
working to attract and retain talent. Our may not emerge for years.
28
Ibid.
29
Alexander Erk, Pradip Patiath, Jonathan Pedde, and Jasper van Ouwerkerk, “Insurance productivity 2030: Reimagining the insurer for
the future,” McKinsey, October 8, 2020.
30
“It’s time for leaders to get real about hybrid,” July 9, 2021.
31
Aaron De Smet, Bonnie Dowling, Marino Mugayar-Baldocchi, and Bill Schaninger, “‘Great Attrition’ or ‘Great Attraction’? The choice is
yours,” McKinsey Quarterly, September 8, 2021.
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