Growth opportunities with Konstanze Reinecke

Insurers in all countries and industries are exploring new growth opportunities. Konstanze Reinecke, partner in the Cologne office, shares his views on growth opportunities in insurance.

McKinsey: What is the current state of insurance growth, can you describe possible challenges and how to address them?

Constance Reinecke: Insurance players, especially in mature markets, have reached saturated growth potential and are looking for new growth opportunities. At the same time, strong market-shaping dynamics are creating exactly the new opportunities that insurers are looking for, for example through ecosystems or verticalization. Playing in these areas requires new capabilities, especially digital skills – new capabilities and skills beyond operational excellence, which has historically been a growth driver enabling attractive price positioning.

McKinsey: Why does this happen? And how will the growth momentum influence the future of the insurance industry?

Constance Reinecke: We are increasingly seeing a win-win dynamic in the insurance industry. Let me describe this for health insurance, as an example. Three types of business model are currently winning:

  1. Global Holders: The top quintile captures almost all of the economic profit with persistent performance.
  2. Local leaders: Achieve peak performance and increase bias.
  3. Digital “attackers” (insurtechs and established tech players): Despite a small scale, the market has high expectations.

With increasing digitalization, required capabilities and respective investments, insurers need to invest their resources wisely. Winning platform players invest up to 20% of their revenue in digitization. This is a greater challenge for small and medium-sized players, and many health insurers fall into this category. These insurers face vital strategic questions: how can they benefit from cross-functional business scale? What are the pros and cons of buying versus building (and also versus partner decisions)? How can they shape a specific value proposition?

McKinsey: So how do the major carriers do it, how do they grow sustainably?

Constance Reinecke: Major players with a strong growth trajectory follow four growth frameworks:

  • Defining success: Determine the appropriate baseline metric for the organization’s growth (including growth rationale, growth metrics and baseline, ambition, and risk definition)
  • Decide “where to play”: Identify growth opportunities across customers, products, channels, and geographies (including adjacency expansion, product innovation, risk appetite reallocation, and customer segmentation)
  • Find out how to pursue the “playground” of growth: Develop the portfolio of bold moves to seize the opportunity (including customer journey transformation, digital service operations, sales and business excellence, agency footprint and model optimization, digital marketing and digital business creation)
  • Decide how to execute the opportunities: Launched execution to achieve transformative growth (best team alignment and effectiveness, digital, data and analytics capabilities, agile operating model and change management)


Constance Reinecke is a partner in the Cologne office of McKinsey.

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