Business Models for Insurance Undertakings

This chapter aims to illustrate the business models of the insurance industry. There are five business models for insurance undertakings in the insurance industry: an elementary structure, a functional structure, a divisional structure, a matrix structure and a network structure. Each of these five structures has its own peculiarities and related advantages and disadvantages. Alongside the five models shown, a hybrid structure is also illustrated, and which arises from combining those that already exist. Furthermore, the new "insurtech" business model that is changing the traditional approach is described. Dealing with these continues by explaining the concept of process is explained. We then move on to a description of the value chain. This model allows us to describe the structure of an organisation as a series of processes and activities (primary and supporting) that are linked together. Primary activities contribute directly to creating an output, whereas supporting activities do not contribute directly to creating an output but are rather needed for this to be produced. Finally, the chapter concludes by dealing with the IT system of an insurance undertaking. This is presented as a series of information technologies, IT infrastructure and applications that allow the activities and processes of an insurance undertaking to be managed in an automated fashion.