Insurance Update Trends in Digital
The global insurance market is in the midst of a game-changing course correction that will re-define ‘business as usual.’ A ‘digital first’ urgency is sweeping across the industry driven by a new generation of consumers, data, automation and Artificial Intelligence. Being in constant dialogue with decision-makers across the industry, Norman Broadbent has pieced together a summary of some of the top trends shaping the insurance industry, and outlined how digital technologies are driving irreversible change.
Artificial Intelligence (AI) and Automation in Claims
Robotics and AI will be at the centre of change in the Insurance space. This is driven by new data channels, better data processing capabilities, and advances in AI algorithms. For example, InsurTech company Lemonade’s business model deploys AI and behavioural economics as core elements. While AI eliminates brokers and paperwork, its behavioural economics capabilities minimise fraud, leading to reduced time, effort and costs. Bots will become mainstream in front and back-office to automate policy servicing and claims management for faster and more personalised customer service. Lemonade’s claims bot Jim assesses and pays out property claims within three seconds! AI and automation will profoundly affect and improve business outcomes in customer experience, cost optimisation, operational efficiencies, market competitiveness and newer business models.
Personalised Products and Pricing
The digital economy will make usage-based, on-demand and ‘all-in-one’ insurance lifestyle products more relevant. Customers will prefer personalised insurance covers instead of the one-size-fits-all products currently available. Flexible coverage options, micro insurance and peer-to-peer insurance will become viable options in the long run. Reinsurers will provide risk capital directly to digital brands, and regulatory frameworks will accommodate shorter value chains. Lifestyle apps will re-imagine the insurer-insured relationships. Application Programming Interfaces (APIs) will enable the creation of insights-driven offerings as they integrate data from multiple sources. Deeper understanding of customer behaviours will lead to more accurate risk assessments, personalised premiums and value on a sustainable basis for better customer experience and brand loyalty, plus reduced false claims. Premiums will become highly personalised, enabled by new sources of tech-enabled data such as Internet of Things, mobile-enabled InsurTech apps and wearables. With the connected devices market growing strongly, insurers will be able to extract real-time and accurate data on the loss exposure of individual consumers. This will help them proactively respond with timely and highly personalised interventions. For example, a UK-based insurance company leverages predictive analytics to model complex customer behaviour, achieve enhanced pricing accuracy and significantly reduce decision time.
As highlighted in the recent Deloitte’s Industry Survey, A Demanding Future, incumbent firms can no longer rely on organic growth or internal innovation. This in turn will push businesses towards greater collaboration with innovative start-ups/InsurTechs, and drive increased M&A activity. InsurTech firms have been showing significant growth in the areas of motor, home and cyber insurance. Such strong growth will stimulate traditional insurers to either acquire technology capabilities or partner with InsurTech companies. With an increasing demand for innovative products and services from millennials, such collaboration will become critical.
Norman Broadbent Group provides a range of Talent Acquisition & Advisory Services to the Insurance sector. This depth of sector expertise and a successful track record in supporting digital transformation makes us the partner of choice for many businesses. If you’d like to hear more about our track record, or to discuss a specific assignment, please contact David Cooper, Director and Head of Insurance, via firstname.lastname@example.org or on +44 (0)20 7484 0110.