Insurance Industry Trends: Growth, Stats, and Forecast
Welcome to the future of insurance — where getting quotes is as simple as clicking a button; managing a coverage can be done via a mobile app; determining a policy premium depends on monitoring devices, and so on.
In 2019, we all saw how ripe the insurance industry was for disruption. Although new technology has already been introduced to the market, not everyone was able to adapt to the tech-driven shift. Some insurers made an early move to use advanced tools and it’s only a matter of time before they reap the benefits of their labor.
In 2020, we can expect tech-infused insurance processes to become more commonplace. Because, in truth, the insurance industry trends show that the only way we’re going is forward.
No matter if you’re the insurer or the insured, we have the latest insurance data, statistics, and trends to give you a better grasp of what’s ahead. Let’s dive right in!
1. The property and casualty (P&C) sector is
the biggest insurance sector in the US.
This doesn’t come as a surprise as, since 2018, the P&C market’s net income has been soaring. Currently, it’s sitting at $58 billion, up from $39 billion in 2017. A 10.5% boost in net premiums was a contributing factor to the market growth alongside the $3 billion underwriting gain.
2. Insurtech partnerships are on the
According to J.D. Power, customer-focused digital solutions will be brought on by strong partnerships between traditional carriers and startups. Aside from providing better customer experience, these partnerships should also help insurers in cutting costs and improving business process efficiencies.
Carriers across the country have are already forged partnerships with Insurtech startups, establishing a more collaborative industry in 2020 and beyond.
3. Mobile apps are changing the insurance account servicing landscape.
The same report shows that 74% of insurance companies are using a mobile app, allowing policyholders to access and manage their policy and claims information on the go.
Interestingly, customers who used mobile apps had a more satisfying experience than those who used desktops or mobile browsers to interact with their insurance companies. As we move further along into the digital age, this is one strong digital insurance trend to prevail this year and in the near future.
4. 68% of young insurance agents believe that the industry is too slow to adapt to new technology.
Regardless of how progressive the previous stat was a booming 68% of young insurance agents think that the digital transformation of insurance companies is too slow. This stunted digital maturity might be due to a lack of resourcefulness.
The recent trends in the insurance industry are urging companies to deliver advanced self-service tools and integrated digital communications to keep up with the leading websites in other industries.
4. 69% of consumers would be willing to have a sensor attached to their car if it would lower their premiums.
Based on a PwC survey, a large portion of the customer base is in favor of using car sensors, particularly if doing so would help them cut costs. This kind of innovative technology could also help the auto insurance industry extend coverage into untapped markets, making policies and premiums much more affordable for everyone.
5. Claims management and policy serving will be automated with the help of AI bots.
(Augusta Free Press)
Artificial Intelligence (AI) has the power to enhance data processing capabilities. When the AI algorithm is merged with automation, we get faster car insurance claims powered by streamlined and automated processes.
In terms of automation, Erie Insurance and Allstate are leading the way as they already started using drones for automated vehicle inspection.
5. By 2025, 95% of customer interactions will be powered by chatbots.
(Duck Creek Technologies)
Chatbots, the love-child of AI and machine learning, can interact with customers, assisting them with policy application or claims process.
GEICO’s “Kate” is one great example of this new technology. Following this trend, digital insurance experts believe that chatbot capabilities will continue to prevail in 2020 (and beyond).
INSURANCE OUTLOOK FOR 2020 AND BEYOND:
As insurers adapt to new business models, customer segments, and new technology, the industry’s best days are ahead. Here are the key takeaways to keep in mind:
Gone are the days when insurers relied on only one channel to distribute products.
From insurance suppliers/brokers to online media, all of these will be utilized to establish financial literacy and security. Still, watch out for insurance challenges.
Consumers are aging and it’s important to study what their exact needs are to provide customized solutions. This should also pave the way for more customer-centric experiences.
And finally, the advanced technology commonly referred to as the “disruptor,” will be the enabler of growth once it’s embedded into the new and improved insurance business models.
Of course, there will always be obstacles but we should not expect a return to the industry’s old ways. As mentioned at the beginning of this article, the only way we’re going is forward. This article was first published on www.policyadvice.net