The pace of change is so fast that what seems likely today could be different tomorrow, but we think there are there are trends in the insurance industry that will stand the test of time.
1. People continue to move center stage.
A big industry trend will be the continued movement to centralize insurance around people -consumers, of course, but also agents. Insurance agents play a vital role in helping families ensure financial security and cannot be replaced by technology -but technology will help agents serve more consumers, and attract new talent to the cause.
The need to modernize and streamline distribution is well understood and empowering agents with digital tools and service offerings is a great investment opportunity. Consumer buying habits have changed and we’ll continue to see growth in direct-to-consumer sales, but not to the exclusion of advisors. Moreover, the ability to provide a modern advisor experience will help our aging industry recruit new talent.
We’re also experiencing a major change from the industry’s traditional product-centric approach to delivering new consumer-centric solutions. It has been slow going but the pace is picking up as we enter the future. Chances are the digital channels that have already impacted how you interact with customers, but over the next few years, many agents will experience significant changes to daily workflows as well.
Advanced analytics will help identify propensity to purchase based on consumer behavioral data and dispatch leads accordingly. Data gathered by the IoT, from wearables to connected autos, will add to and enrich our understanding of our customers and provide the foundation for individualized policies. Automation will streamline time-intensive processes so agents can focus on serving customers.
The insurance industry realizes that people matter more now than ever, and we expect that this will reinvigorate agents and consumers alike.
2. M&A and partnership activity will Increase.
More people believe that mergers and acquisitions will drive the insurance industry’s growth over the next five years. This activity is expected to help insurers compete in the rapidly changing digital world.
We know that many companies are struggling nowadays with legacy systems and processes. For this reason, we think that modern technology will feature prominently in new partnerships and thru mergers and acquisitions activity. For agents, this could mean access to solutions specifically designed to help you more effectively target, capture, convert, and retain customers.
We’re already seeing a lot of activity in insurtech and expect this trend to increase over the next months and years.
3. Technological advances and practical applications will continue to proliferate.
By now we’re all familiar with the hype around emerging technologies including blockchain and AI. The insurance industry is still grappling with an understanding of how these technologies have to offer, but we believe that in the upcoming future, we’ll start to see more practical applications and solutions built with advanced technologies.
AI and machine learning have already begun to transform product development, underwriting, pricing, and fraud protection. For example, AI can learn and adapt to thieves’ behavior in real-time, shifting quickly to block fraudulent claims. Also, algorithms are helping agents target potential customers and prioritize workflows to help you sell more policies, more cost-effectively.
Most people are interested to see creative applications of the blockchain in insurance. A digital ledger that can’t be altered increases transparency and trust in the record. We anticipate to see new blockchain applications in claims and fraud prevention, as well as streamlining payments and reducing administrative costs.
Embracing new technologies is critical to remaining competitive and we encouraged to see the industry is increasingly receptive to modernization.
4. Regulatory changes and a focus on the ethical use of data will keep us thinking about privacy and data security.
Executives think that cyber and data regulation is a top challenge to fully realizing digital disruption. Regulatory uncertainty is not new to the insurance industry, but digital disruption brings unique challenges.
As we collect more data online, privacy is a paramount concern and agents need to ensure customer information is secure. We’ll also need to consider ethics when it comes to the use of AI and customer data. Built-in bias and discrimination are possible, and the industry needs to stay vigilant.
Consumer protections are in the industry’s best interest and will increasingly drive regulatory activity as we collect more data and automate more processes.
The future is sure to be exciting as it brings many changes to the insurance industry. Competitive pressures are driving the trends we have highlighted here and may very well be the defining trends of the decade to come. It’s hard to make these types of prognostications but also fun to think about all the positive changes that are coming. Cheers to a great future for all of us in the insurance industry!