The Top 5 Trends Impacting P&C Insurance in 2022
1. The Changing Work Landscape
Let’s look at the changing work landscape and its impact on auto sales, travel, and accident severity.
According to a survey by Workplace.com, 37% of US employees will work remotely in 2022.
The changing nature of work along with the cash pumped into the economy from federal aid prompted many people to buy their very first vehicle in 2020.
New vehicle registrations in New York City alone rose 37 percent between August and October 2020.
This year, U.S. auto sales are expected to rise from 15 million to 15.7 million, with short supplies limiting sales but boosting pricing power. Both point to strong recovery for the auto industry.
In 2020 and ’21 we saw unprecedented declines in miles driven. The new omicron variant is the big unknown in forecasting traffic volume in 2022, with inflation also clouding the picture. Through September government data shows miles driven still down 5 percent from 2019, and it is anticipated that miles driven will continue to recover in 2022, but where and when people are driving will be different.
2. The Growth of ADAS
The second trend is the increase in the overall number of vehicles equipped with ADAS and connected car technologies.
According to data from MarketWatch, ADAS is anticipated to rise at a considerable rate between 2022 and 2027.
Recent reports from OEM’s suggest that nearly 80% of vehicles purchased in the U.S. market between Sep 1, 2020, and Aug 31, 2021, were minimally equipped with automatic emergency braking.
Access to that connected car data is a central part of the Right to Repair legislation now making its way through the courts. And with more vehicles now coming equipped with semi-autonomous features, the National Highway Traffic Safety Administration’s interest in understanding more about the impacts of these systems on real-world driving drove the issuance last year of a Standing General Order outlining reporting requirements the OE’s and other companies must now meet.
3. Climate Change
The third trend is Climate Change. The P&C insurance industry has been at the forefront of feeling the effects of climate change, as the number and severity of severe storms have grown. And more frequent catastrophic events combined with evolving regulatory requirements could threaten company business models and make insuring some risks unaffordable for customers or unfeasible for insurers.
4. Changing Customer Experiences
Next are changing customer expectations where digital, mobile, and personalized experiences have become table stakes.
According to a recent study of P&C insurance customers conducted by JD Powers, while the industry is investing heavily in back-end technologies like straight-through processing to improve the claims experience, there’s still room for improvement.
The study found that while the technology is there, adoption may be a barrier.
Our last trend is complexity. The year ahead promises more vehicle technology such as ADAS, more data, and more disruptive entrants turning heads and turning traditional business models upside down. In 2022, the industry will continue to turn to technology and connected systems to simplify and streamline processes to ultimately create better customer experiences.
The original, unedited article was first featured on cccis.com