With the evolution of digital technologies and great changes in market demand, the insurance industry is facing significant changes. As in any other industry, consumers of the insurance packages require more personalized products and offers to meet their needs. Thus, every insurance business is searching for ways to cover these needs through technology. Inside of their organizations, insurance agencies are trying to build networks supporting cross-industry insurance services like life and health, property, and casualty.
Trends also add pace to transformation. You can reshape your enterprise with a custom solution or look for better ways to manage risks. Many companies are starting to harness the benefits of innovative technologies like artificial intelligence, machine learning, the Internet of Things, cloud computing, etc. Ultimately, every agency is focused on establishing strong relationships with its customers and bringing new values to them.
2020 Trends Affecting the Insurance Industry
According to Deloitte, four main trends will define the insurance industry in 2020: new customers, new growth strategies, increase of mergers & acquisitions (M&A), digitalization. Let’s take a closer look at each of these trends to understand how the insurance business will change in the next few years.
Trend 1 – New clients
New customer requirements and needs impact the insurance market. Competition is mounting. New companies entering the market are offering lower prices for underwriting and enhanced customer support. Consequently, incumbents need to reshape their business models and come up with new products that meet current customer needs. Consumers also expect from insurance agencies staff availability and willingness to help them at any time.
What could insurance organizations do to improve their services?
Here are some steps that can be taken to enhance the level of services provided by insurance companies:
- Discover customer audiences, analyze their new needs, habits, and behavior. Put a customer in the center.
- Pay attention to providing shared services.
- Offer non-insurance products to attract more customers.
Trend 2 – Growth strategy
In 2020, insurance and medicine are moving to a preventative approach, i.e., from product-based selling to service-based. Today, insurance agencies tend to help people avoid losses that can be the result of unforeseeable events.
What actually should insurance providers do?
- Pay more attention to services rather than products.
- Implement new technology solutions for better analytics and more accurate data.
- Develop new products to retain existing clients and attract new ones.
Trend 3 – Mergers & Acquisitions
C-level executives in the insurance industry understand that natural business growth isn’t enough today. Thus, they consider that mutually beneficial partnerships can help their companies grow more effectively. That’s why many providers are searching for cooperation with start-ups and insure-tech.
What should insurers do to increase their growth?
- Search for reliable partners.
- Pay attention to new markets.
- Improve deal-making strategies.
Trend 4 – Digitalization
It’s high time to leverage the benefits of innovative technologies such as artificial intelligence, machine learning, Big Data, to name a few. These solutions can modernize both your products and services, automate most of the operational activities, and ensure excellent customer relationship management.
How to digitally transform the insurance industry?
- Conduct software audits and gets professional IT consulting.
- Plan investments according to new digital transformation strategies.
- Think of cloud migration as a top priority as it provides dozens of benefits to any existing business.
- Define the roles within your organization that will be responsible for digitalization. These people must have a strong background in IT and extensive expertise in the insurance domain.
How Do Insurtech Trends Impact Consumers?
Obviously, in such a competitive environment, agents and brokers will try not only to meet customer expectations but also exceed those. Let’s find out what buyers really want from insurers.
First off, any consumer wants to get a high level of and reliable service. Secondly, most buyers want to have options for self-service. Thirdly, people pay attention to what tools you offer for managing their policies and claims, communicating, and getting support. Ultimately, they also take into account whether you can offer some personalized products and mobile support.
According to Softwareadvice, 38% of buyers consider online access and self-service to be very important when selecting an insurance provider. What do these capabilities give to consumers? The access to self-service allows people to make amendments in their profiles, get notifications, reminders, communicate with support. This approach enhances customer satisfaction and helps companies increase the number of loyal clients.
Having custom insurance software in place also impacts the buyer’s choice. Custom-built systems provide better functionalities to manage claims, policies, underwriting, quoting, etc. under one roof. Consequently, all the operational processes are well-organized, which leads to higher customer satisfaction.
Conclusion: How to Start Reshaping Your Insurance Business?
Technology trends have a significant influence on both the insurance industry development and buyers. The emergence of disruptive solutions can’t be simply ignored unless you want to miss great opportunities. Today is the right time to start exploring these opportunities and the ways to seize them. Custom software solutions can solve a lot of challenges you face:
- Improve customer satisfaction and loyalty
- Help create personalized offerings and enter new markets
- Streamline business processes
- Provide more accurate analytical data about customer behavior
- Improve employees’ productivity
- Differentiate your company from competitors
How to start the digital transformation in insurance? To embrace the change and take advantage of technology, companies should first understand their present state of the business and think of the opportunities they can seize in the future.
A business gap analysis can be the first step towards finding existing issues and solutions to them. Then, you should find a reliable vendor and provide some initial requirements. Next, your vendor should come up with the technology that can bridge the gap between your current state and a desired one. Usually, such companies are custom software developers and business analysts with extensive expertise in a particular range of domains. You should find those who have expertise in the insurance industry, i.e., specialists who have successfully accomplished the projects similar to yours.