Old rules need to be broken and new ones need to be made to guarantee customer satisfaction and retention in uncertain times. Insurers also should expect leading tech companies such as Google and Amazon to extend their influence into the sector. metamorworks
When ended, insurers predicted pandemic-related changes to the industry and anticipated the growth of coverages in business disruption or virus-specific catastrophes. However, few envisaged that would be a banner year for climate-related risk. The year brought to light the need for increased speed to market when launching new products, and agility when it came to customization.
With the annual severe weather insured losses for surpassing billions of dollars in the U.S. alone, accidents caused by climate change are a key risk sector insurers will have to look at going forward. S&P research found that major global companies have at least one asset that a natural disaster could highly impact, it is clear that advancements in this sector are needed.
Carriers need to implement new digital tools that allow them to make better provisions for incidents in this space and improve their ability to create personalized products. In addition, old rules need to be broken and new ones need to be made to guarantee customer satisfaction and retention in uncertain times.
When it comes to breaking old molds and making way for change, insurers should look to their product manufacturing process. Traditionally, insurers would stay current and branch out into new risk niches by editing small sections of one central contract base, keeping % of the content the same. Unfortunately, this is an outdated approach and a short-term solution that will become a setback when expanding to different markets.
Consumers today have so much information and personalized services at the click of a button, and the number of products available digitally is expanding all the time. It is no surprise, then, that we should expect a revolution in the product manufacturing process, with speed to market becoming a key factor in the success or failure of insurers.
Individualized insurance products will become abundantly available, making competition within niche markets ruthless. In this race to innovate, the early birds will catch the worm.
Technology is a key asset for insurers in this race to advance. Instead of relying on slow and outdated systems, insurers should redirect their attention towards SaaS-based solutions. By incorporating cloud-based platforms, insurers can access a whole range of digital tools that feed into customizable insurance products that, in turn, appeal to a wide variety of customers.
The elevation of the product creation process can be helped along by leveraging new advancements in data, as readily available datasets incite radical change in the insurance market. Companies appear to provide specific analytics on a particular niche and make this valuable information accessible to any insurer regardless of their IT expertise. Before underwriting, insurers can access these datasets and better adjust their products according to customer wants and needs.
This data can be further optimized through AI incorporation, an excellent tool for predictions and long-term risk assessment. AI imaging and the insights derived from AI assets are invaluable to insurers in the P&C space, providing them with up-to-date and highly accurate property characteristics, facilitating easier underwriting. Moreover, employing this kind of technology is a no brainer as the world faces increasingly unpredictable and suddenly triggered risks in weather and cyber.
With these datasets gaining more momentum in the P&C insurance space, insurers should expect leading tech companies such as Google and Amazon to extend their influence into the sector. By leveraging their information and analytics to state firms, these companies could create a new stream of digital resources. Carriers can turn to such firms and form partnerships through which niche insurance products can be personalized.
However, capitalizing on information alone will not be enough to stay ahead of the curve. Tech companies bring a burst of creativity to the insurance market, setting a new standard in product distribution. The notions of availability and immediacy are at the core of their product distribution strategy. Amazon is a key player when it comes to this, making smart and agile product placements and recommendations in various sectors. Today’s consumers, who are connected to so many platforms and navigate the digital space so quickly, can easily purchase everything: from clothes and household items to cars, homes, and travel. The insurance market is adopting the same seamless buying ethos, and carriers should be flexible and ready to address this change.
Ground-breaking data and innovative technology will be at the heart of profitability, and the insurance market will continue to see changes to the product manufacturing process. What carriers need to remember is that customers need them now more than ever. The world may be on its way to overcoming the COVID- pandemic, but new risks are always around the corner, and insurers must constantly be one step ahead.