Top Trends in Insurance Industry in 2021
The global insurance market is growing faster than ever and it has reached a number which is 5 Trillion US dollars. There are many inventions and new ways that are being introduce in the market of insurance which can change it in a major way. As the rise of digital world now the new generation is leaning more toward automation of the processes, data and to the way of the future which is Artificial Intelligence.
Now the change is inevitable as there are many digital technologies that are reshaping things in the insurance industry. In this we will take a look at some of the biggest trends that are going to revolutionise the insurance industry.
- New Models Personalize Products
As the economy is moving towards digitalization the all in one insurance based product will be more popular in the upcoming days. At this moment there is not much personalized coverage available for people. But in the future people are going to want insurance covers that are personalized for their needs.
Distribution costs are a major problem these days for insurers who collect premiums. Nearly 80 percent of the premiums are lost in the process. With digital models designed for that purpose the loss can be minimized.
There are some other strategies which will help the insurers like:
- Peer to Peer Insurance
- Micro Insurance
- Flexible Coverage Options
Lifestyle apps are also making it easier for insurance companies to develop good risk assessment skills and also the ability to offer personalized premiums to people.
- AI & Automation
With the advancements in Artificial Intelligence there are better data indicators available, also new data driven channels are being produced. Artificial intelligence and RPA (Robotic Process Automation) is going to be the center of the insurance industry in the near future.
There are InsurTech companies like Tyche and Lemonade which are pioneering in making Artificial Intelligence as their main strategy. They are free from the paperwork and brokers, are saving time and money and also able to identify fraud better than other companies.
With the help of artificially created bots the claims can be answered much easier and faster than before. The AI is going to impact the business of insurance and customer outcomes in a major way and it is going to lead to more innovation and discovery in this field.
- Advanced Analytics and Proactiveness
The future is all about highly personalized premiums, which will be enabled by the huge shifts and discoveries in the digital world like internet of things and high tech insurance related apps. There will be real time data gathering if there is any loss exposusre to the consumers. Also the P&C (Property and Casualty) insurers are going to be able to get more the data more accurately and faster than before.
The use of technological devices is also very important. The companies are using drones and satellite imaging to do analysis and estimation of property damage. After the Hurricane Harvey some of the US auto insurance companies used drones to assess the damage caused by the hurricane.
Insurance industry is going to be really revamped by the Advanced Analytics in following ways:
- Business Strategy Optimization
- Dynamic Segmentation of Users and Needs
- Adjusting Policy Price
- Identifying Growth Opportunities
- Modeling of Behaviors
- Mainstreaming Blockchain
If insurance companies are going to use huge percentage of customer’s data in real time and process it for the faster and reliable insurance claims, there needs to be a system which can easily and securely transfer that data across stakeholders and organizations.
Blockchain Technology is exactly the thing that is needed for this task. Blockchain technology insures integrity and security while transferring and acquiring of data across multiple stakeholders. There are many benefits that Blockchain has to offer to the insurance industry when it comes to the use of data and securing it. It can reduce operational costs and offer high technology solutions. Lets look at some of the ways blockchain can help:
- Decentralized Autonomous Organizations
- Underwriting to Claims Processing
- Reliable Data Availability
- Smart Contracts
- Identity Management
- Fraud Management
With these technologies many insurance companies will be able to get a foothold in the insurance market in the future. The main thing is to know when and how to tap into these technologies and use those for moving forward.