The P&C insurance industry is making significant strides in addressing longstanding challenges through the adoption of cutting-edge technology. Collaborative efforts between insurance companies, technology firms, and supportive partners worldwide are paving the way for innovative insurance products and services on the horizon. This year, the insurance sector will witness the introduction of novel developments and business models within the solution ecosystem, all aimed at providing customers with real-time and enhanced service experiences.
The underwriting process has undergone full automation in the insurance industry, shifting away from the traditional reliance on paper documents and in-person signatu;res. Dealing with numerous agents and clients has made underwriting insurance a tedious and time-consuming task, leading to increased stress and decreased productivity. However, the automation of this process has brought significant improvements.
Thanks to enterprise software development projects, insurance companies have embraced automated underwriting. This accelerated underwriting has proven to be advantageous, saving both time and money for businesses. According to a LIMRA survey, 74% of respondents reported experiencing these benefits, while 59% noted a boost in sales.
Over the last five years, there has been a surge in the creation of numerous insurtech startups, many of which may struggle to survive in a less favorable economic environment. Despite the desire of equity owners to avoid transactions in a declining market, some startups will have no alternative and may be forced to cease operations through acquisition, merger, or worse.
When considering entering into contracts, buyers must carefully assess the future prospects of vendors, especially regarding the sustainability of their newly introduced P&C insurance products.
Marketing and Sales Dissemination
As market pressures push insurers to prioritize security and profitability, they will begin to focus on internal improvements. Chief Claims Officers, whose ideas on loss adjustment expense and indemnity accuracy were previously overlooked in budget cycles, will now find a more receptive audience. In this current climate, both in-house teams and external vendors who can present compelling arguments for cost-cutting supported by analytics will be highly valued.
Insurance apps and client portals have been developed from scratch. Over the last four years, there has been an 80% increase in the number of customers who would consider switching insurance companies due to a subpar online experience. In 2020, most insurers (96%) in Europe already had effective strategies in place to enhance their digital capabilities, showing a significant improvement in their approach.
Presently, 74% of insurers surveyed now offer their customers the option to manage their policies using mobile apps. Consequently, these applications have surpassed traditional methods and become the preferred way to service customers’ accounts.
In 2023, insurance companies will prioritize operational efficiency and profitability. They aim to improve various aspects, including efficiency, pricing accuracy, and reducing leakage and waste caused by inflation’s impact on rising claim costs and the inability to immediately raise rates. While insurtechs and COVID have influenced the industry, insurers are now focusing on traditional “old normal” investment options to ensure long-term financial viability through operational efficiency and accurate risk pricing.
As insurance and other sectors have become more adaptable and flexible, complex rule sets and increased cognitive load have emerged in managing and developing software solutions. Businesses strive to keep up with the demand for greater adaptability, but they are limited by the speed at which software can be developed within predefined boundaries. However, the emergence of revolutionary artificial intelligence (AI), such as GPT-3 (Generative Pre-trained Transformer 3), shows promising potential in natural language processing, paving the way for advanced applications beyond simple code execution rules.
Customer Interactions Across All Channels
A recent survey among insurance customers aged 18 to 24 showed that 53% of them intend to use digital channels to communicate with their insurers in the next 90 days. Particularly, younger audiences have a strong preference for digital engagement and expect a seamless and integrated experience across all available communication platforms.
To effectively cater to their clients throughout the entire customer lifecycle, insurers can establish an omnichannel marketing, sales, and customer service ecosystem. This approach enables businesses to retain control over customer interactions and ultimately foster loyalty among their clientele.
Invariably, large corporations prioritize anticipating future efficiency gains. Given the prevailing insurance tech trends, it is reasonable to expect a rise in insurance spending in the upcoming years. Insurance companies that engage top-notch custom software development firms have the potential to develop state-of-the-art internal systems powered by AI, predictive analytics, chatbots, and other advanced technologies. Consequently, insurers will be confronted with numerous crucial decisions regarding their future technological investments.