Many sectors have been exploring possibilities on how to personalise their customer’s experience in the effort to cope with the current health crisis. Structural changes across sectors are happening all around the globe. Insurance industry is no exception.
It is known that the most effective communication channels during the pandemic were mobile apps, messaging platforms & chatbots. Several reports from multiple sectors forecasted that AI’s initial impact would primarily relate to improving efficiencies and automating existing customer-facing underwriting and claims processes. Over time, its impact will be more far-reaching; it will identify, assess, and underwrite emerging risks and identify new revenue sources, impacting nearly every aspect of the P&C insurance industry.
Demand for tailored products, such as business-continuity cover for small enterprises, pandemic insurance, and event-cancellation policies, will soar. Property & Casualty (P&C) insurance and Commercial insurance will see policies changes. Commercial insurance will face different types of claims resulting from injury or death.
Doing business in the insurance industry will change, as doing business is changing in all industries in all sectors lately. Insurance brokerage will be digitalized, but already there are so many changes that are inevitably leading us to the up-to-date modern insurance agencies. Self-service applications (such as Self-Service Kiosk from PathwayPort) are literally your portal to all policies, documents, pink-slips, etc. Customer support is becoming so customized that you somehow create a really strong bond with your insurance agency (or agent) even though we all seek a digital (and “further”) approach.
These structural changes will interlace, on the other side, with people who use wearable technological devices. From wearables like Google Glass to internet enabled home automation devices like Nest, internet connected devices will allow insurers a novel personalisation of services.
To rethink the offer is to survive and thrive in the business. Property and casualty insurers will need training to have a deep understanding of new potential threats for small businesses. Similarly the insurance industry will see some significant mergers and acquisitions in 2021.
Let’s see how the sector is going to be transformed from the more advanced use of trigger emails to new technological frontiers:
Studies show that companies using triggered emails enjoy a 34 percent increase in revenue and earn 53 percent more conversions. Similar to retention efforts, AI can also facilitate marketing efforts to target customers most effectively.
Digital services and phygital experiences
The ability to combine the physical and digital experience is to provide customers unique, highly-personalized experiences while stipulating a contract through mobile devices. Some reports even forecasted that AI’s initial impact will primarily relate to improving efficiencies and automating existing customer-facing underwriting and claims processes. AI algorithms can process data and use this data to identify potential or existing customers for re-engagement campaigns.
The switch to usage-based coverage
Working remotely will change the requirements and specifications of many insurance types. The reduced movement of people will incentivize insurers to create usage based coverage.
Security and privacy
Blockchain technology accounts for the issues of security and trust in several ways. Personal insurance data or health records could be encoded and stored on the blockchain with a private key, so that they are only accessible by certain individuals.
“Sustainable insurers” will outshine competitors. They’ll strengthen their brand and update fast. Commercial insurance will be impacted. Car insurers are likely to introduce more incentives for their customers to switch to electric cars. Some may advertise their intention to stop providing cover for petrol and diesel vehicles. The fear of “greenwashing” recently started progressing, after several affairs. Today companies can’t just say that they are green, but there has to be a proof of that. Insurance agencies also need to persuade the market that, if they claim the sustainable approach – that those practices are in deed – green.
Bitcoin as a new asset class
MassMutual recently invested US$100 million in Bitcoin for its general investment fund. Plenty of other carriers will start adding cryptocurrencies to their investment portfolios.
Life and health insurances
Carriers that quickly establish a strong presence across the health ecosystem will gain a big advantage over competitors. There will be a wider insight into customer’s needs. Digital health, wellness products and services will be emphasised.
The insurance coverage will expand beyond traditional markets. The flat premium revenues and low investment returns predicted for 2021 will accelerate this trend.
Considering these 8 factors in time will enable insurers to align their businesses to the changing needs of their customers and deliver new lucrative products and services.
We’re living in exciting times where technology will allow us to have a complex tailormade interaction, allowing us to execute operations that were impossible beforehand without not only our physical presence, but also the physical presence of an external entity to validate the desired contract stipulation or change.