Insurance Industry 2020 and 2021 – Review and Trends
2020 has been a year for the books, that’s for sure.
Last year had brought challenges we did not expect but also showed us the importance of digitalization in our society as well as in the insurance industry.2020 did show that a digital change is needed in the insurance industry and maybe has been the catalyst for long-awaited change. Not only have consumers’ needs shifted, so have their habits and expectations.
During 2020 everybody has talked about how the pandemic has accelerated digital change. Innovation was pushed in most industries but also in our daily life. Customer expectations have evolved, and it is up to the insurance businesses to grow with these expectations.
As we closed 2020, the insurance industry heads towards more digitalization, better customer, and employee experience. Age-old insurance problems such as risk-assessment, claims processing, and policy distribution will be solved by agile innovative applications.
2020 has also reminded us that the future is not predictable. This fact might be good to remember because without uncertainty there would not be an insurance industry at all.
Even if the industry is unpredictable, some key trends and innovations have been spotted in 2020 and will help insurers to align their business processes with the changing needs of their customers.
Moving on in 2021, we see one main trend that will impact the insurance business: An even more customer-centric and personalized approach.
Insurance has been traditionally a very conservative industry. This is changing, and we believe it will shift from legacy to innovation.
It always has been a hassle to offer an end-to-end digital experience for customers and system users concurrently. Insurers need to meet their customers at the point of their need, but also the needs of their staff like underwriters, brokers, or claim handlers.
Organizing an insurance business in one ecosystem makes it possible to offer a digital solution for everyone. If insurance software is organized as an open ecosystem, knowledge, best practice solutions, and offerings from cross-industry players can be combined in one platform.
Next or alongside an own ecosystem we see three features and trends that will become more important during 2021.
No-code and Low Code
In some segments, no-code tools became the norm. This approach will grow in the insurance industry. No-code applications make it possible to launch insurance products in no time by offering an easy and simple user interface with drag and drop capabilities
A no-code platform is a perfect way to remove barriers and drive digital transformation. But what does no-code mean? In one sentence: No-code makes it possible for everyone to create insurance products and designs without a single line of code or support from the IT department.
More and more consumers enjoy flexibility and cost-saving offers provided by pay-as-you-go insurance services. Usage-based premiums have been a trend in the market, and they will continue to grow demand in the future as well. We believe fixed premiums will lapse, and flexible solutions will rise.
It will be more important to deliver tailored products to fit customer needs. This new personalization is only possible through new technology. Making insurance more agile and scalable for customers is only possible through IoT and mobile-enabled applications.
In the future, P&C insurers will be able to use real-time data to answer questions accurately and swiftly. Keen insights through data create a deeper overview of individual risk profiles, as well as reducing the claim loss ratios through faster and intelligent claim handling
APIs – Platform Approach or Ecosystem
APIs make it possible for insurance companies to enhance their digital experience and embrace new technologies to extend customer experience.
One take away is to cut down the manual and time-intensive processes hence reducing paper trail, not only to save time but also money.
With the new opportunities for insurers through digital technology, companies will be eager to expand beyond the traditional markets. The keyword here is “partnership”, which aligns with an ecosystem for insurers to complain to multiple partners.
Such an open API ecosystem approach can help insurers to generate new leads, have lower distribution costs, increase customer retention, improve prevention and assistance to reduce claims.
What are the benefits of being an ecosystem player?
- You reduce friction for customers wishing to switch between related services. This way your customers are not frustrated, hence, log in and out and struggle in different channels.
- It is possible to provide better and more personalized solutions to customers through the data provided by different services.
- You have the potential to open new revenue streams.
Insurance companies that take the lead in creating an ecosystem will be also the leader of the market in the future. Ecosystems are not only here to solve current problems but to revolute the insurance industry long term.
An insurance Platform as a Service, like i2go allows you to build your own insurance ecosystem – providing you with a configurable API-Driven Platform. API-based IT architectures support quick integrations of applications into seamless customer journeys. Analytics capabilities and data management can help carriers to take advantage of the combined touchpoints and data.
We believe that ecosystems will become central for insurers. Talk to us to learn more.