This blog presents top trends and priorities for insurance businesses identified by Stuart Rose, subject expert and strategic advisor at Aite-Novarica
“Stop chasing trends,” is the “smart” advice dealt all too often to businesses. You should – if you don’t mind losing business in the pursuit of being a pathbreaker. While being an innovator is glorified – and rightfully so – don’t forget that trends are what define the next few cobblestones in your field of business. Ignoring them is simply ignoring prospective business. Be smart.
This rule of trend holds good for insurance business just as any other. It is, at the end of the day, a highly-competitive space guided predominantly by customer expectations and industry pulse.
Our recent webinar “How AI Impacts underwriting & claims journey to improve CX”, jointly conducted by Aspire Systems and Aite-Novarica, covered valuable trends & new-age insurance industry solutions. Read on to find out the top property & casualty insurance trends, and life insurance trends identified by Stuart Rose, strategic advisor at Aite-Novarica. Learn about the priorities of insurers across the world too, from results of an Aite-Novarica survey.
Top P&C insurance trends:
- Insurtech goes mainstream
- Adoption of AI-based solution
- Don’t duck data & analytics
- Addressing cyber risk
- Embrace digital
- Underwriting revolution
- Claims optimization
- Keeping up with insurance fraud
Digitalization, AI, cloud and data have dominated insurance trends and continue to do so. “Insurtech goes mainstream” from the list above is the most important trend from the list for property and casualty insurance domain, according to Stuart Rose. “There is no doubt that investment in insurtech companies continue to grow. Even in the face of the global pandemic or recession now, that many people are starting to talk about,” Stuart said. Even the insurtech startups from a decade ago have grown more mature and you can see an increase in larger funding rounds, he explained.
However, the most significant aspect within this insurtech trend is the new attention it is getting. I consider it to be established than just “being out there”. “Core facilitators are seeing considerable interest in insurtech and insurance IT services than it being just a trend or a buzzword. System providers are expanding their partner ecosystem to allow insurers access to multiple insurtech startup solutions, through a single point of entry, APIs,” he added. This is allowing them create really seamless customer experience throughout the policy lifecycle – from quotation to claims, the analyst reasoned.
Top trends in life insurance, annuities & benefits:
1. Go from digital to digitalization
2. Don’t duck data & analytics
3. Predictive analytics getting hotter
4. Insurtech goes mainstream
5. Personalization a win-win
6. Get creative to retain talent
While many of the trends from P&C insurance overlap with this trend watch for the life insurance domain, here’s Stuart’s most interesting pick: Insurers getting creative to attract and retain talent. “Even before the pandemic, when there was talk of this great resignation, insurance companies were facing a talent shortage. Skilled resources such as claim adjustors, underwriters and agents are in this “baby boomer” age and are starting to retire and have to be replaced,” said Stuart. To make things worse, there is not a steady stream of graduates coming out of universities and colleges wanting to get into the insurance industry, he said. Hence, insurers really need to prioritize the need to not just attract but retain young talent.
“The good thing is the AI and insurtech boom is helping. These new technologies are drawing a new generation into the industry as they develop specific solutions for P&C and life insurance carriers,” said Stuart. The significance of AI for insurance underwriting and policy underwriting insurance solutions have been growing steadily.
Top 4 priorities of insurers for 2022 & beyond:
Now that we’ve seen top trends, let’s look at the capabilities and priorities of insurers across the globe. The results are from an exclusive survey conducted by Aite-Novarica among large and mid-sized insurers, asking them to rank their top three priorities for 2022 & beyond from the list of areas identified.
Proprietary to Aite-Novarica Group
“There is still a significant difference among priorities for large insurance carriers and mid-sized ones and it was very obvious from the survey,” said Stuart Rose. Here, large insurers are ones with written premium of more than $1 billion. “Such large carriers want to get bigger and better, increase their revenue, while midsized carriers were a bit more tactical with their priorities. Their focus was on reducing operational expenses,” said Stuart. The top priority was, clearly and unsurprisingly, data and analytics. “Makes sense, everybody wants to have a data-driven organisation,” commented Stuart.
This was followed by ease of doing business and speed to market. “Insurance is a highly combustive industry. Speed to market changes continuously for existing products as well as new ones and can be the key differentiator in many cases.,” said Stuart, explaining why it is rightly a priority.
Optimizing internal workflows came in as the fourth top priority of the surveyed insurers. Stuart saw this as a positive outcome of the pandemic. “Many organisations have had to review many of their internal processes because the existing workflow did not necessarily work in a remote or virtual environment. It is really critical,” said Stuart. While a lot of focus being shed on improving customer experience, it can only be fully achieved when insurers improve their internal processes, the expert added.
Wait for our next blog on the analyst’s views on the role of AI in claims & underwriting, explained with case studies by Maha Santaram, the Insurance Practice Head at Aspire Systems
You can also check out in-depth views and more about the role of How AI in shaping insurance customer experience in this webinar recording: : How AI can shape Insurance CX Journey: From quotation to claims.
(Part II of this blog is published on October 20, 2022).