What challenges, opportunities may be ahead for insurers?

The disruptions created by the pandemic, natural disasters and a shifting workforce in the past year have challenged insurers to respond to market uncertainties with speed – at scale.

As digitization matures, insurance companies have seen firsthand how technologies – from SaaS and cloud technologies to the Internet of Things to artificial intelligence and machine learning have helped facilitate insurance processes for more streamlined claims management and improved customer experiences.

Before looking at where technology met its goals and where there are opportunities for 2022, it bears noting how carriers mitigated uncertainty and aggressively charted a path forward. Carriers didn’t shy away from the need to digitize or accelerate movement to the cloud.

This has me both confident in and excited about the future of insurance (and insurance experiences) that carriers will build on top of new technologies.

Where carriers excelled 
In general, many carriers enabled workforces and serviced customers remotely during the past year without too many hiccups or migration pains. Carriers of personal, commercial and specialty insurance conducted ‘business as usual,’ built on solid technology infrastructure – and those that got a head start in 2020 reaped the benefits.

There was a new level of maturity and competence in 2021 when it came to conducting business remote or digital-first. I expect this to continue in 2022 as comfort levels within the carrier workforce grow and smart businesses find more creative and actionable ways to serve constituents.

Speed to market was also an area where carriers met the demand with fervor. We saw the introduction of new products and the adaptation of products at pace, spurred by advancements in both low-code-enabled tools and coding maturity where rules take priority over lines of written code. Add this to the list of trends here to stay.

Let’s not forget the agent side either. In 2021, what felt ‘old’ became ‘new’ again. Insurance is evaluated, written and serviced with speed, digitally. But 2021 re-enforced the value of agents as a critical part of the insurance ecosystem. Carriers turned to technology to empower agents and the year served as a reminder that the “insurance” experience isn’t just about the final customer, the agent experience must also be a priority. Forget this at your peril.

Where new opportunities present
With a recent hardening of rates, carriers are paying very close attention to product offerings and even closer attention to the markets to inform these decisions. Market conditions are placing a premium on adaptability, and carriers are looking to find the right size, right product, right risk and right fit for each line of business within each region or country. This trend will continue, spurred by agile technology.

As a quick aside, this digitization also opens the door to more creative ways to both gather data and to use data effectively to assess risk. Make no bones about it, insurance has forever been dictated by data, but both the prevalence of IoT and a growing willingness to share data in exchange for better rates have proven an enticing prospect. This is a fast-moving space worth watching – and one that requires the right balance of accessibility and privacy (with the insured at the heart of this equation).

With better data comes an opportunity for more practical use of analytics. In the coming year and beyond, we will see analytics shift from projects to products. Rather than simply using analytics for modeling or on a one-and-done project basis, we will see analytics become more ingrained in the product and influence systems in closer to real-time. Think always-on and running in the background.

Finally, we will see carriers of more robust and complex lines of insurance grapple with the best way to offer digital experiences. Right now, while the engagement channel and means of purchase may be digital for many insurance products, much of this engagement is still very analog at its core. For example, a policy will still be in a PDF, it is just downloaded via a website vs. getting sent in the mail. This will be interesting to watch play out as the industry balances the right amount of information to gather to provide the right quote, and an understanding of the types of information an insured needs to see before moving to purchase.

A new standard of insurance
Excitingly for the industry, in a move that directly impacts all of the prior workflows, products and experiences discussed, we’ve seen cloud adoption reach new levels of maturity.

While not every carrier has fully adopted or fully migrated business to the cloud, migration times have drastically shortened and the value is being realized more immediately.

We’re also seeing carriers dictate the pace with which they want to move in a way that makes sense for its operation, its workforce and its customers. It’s standing up a new line of business via SaaS. It’s taking those learnings and copying those rules over to new products or existing lines. It’s finding ways to optimize IT functions in a way that directly impacts business outcomes versus conducting preventative maintenance on-premise.

This is what excites me the most – and I believe it will be the new standard of insurance.

It might not be fully realized in 2022, but for many carriers, it’s today’s reality. For others, it’s fast approaching on the horizon. Blink and you’ll miss it.

A final thought on talent
HFS Research recently conducted a roundtable that put enterprise operations talent attrition rates anywhere between 25% and 75%.

Insurance industry talent will be front and center in 2022. Move too slowly to embrace digital and risk losing top talent – and also risk losing customers who may be directly impacted by this reshuffle.

I firmly believe that the talented individuals that comprise the insurance industry are spurred by a greater good, to protect people, property and business.

Putting the right digital solutions in place broadens each individual’s ability to positively impact the business of insurance, and opens the door for the industry to lure talent from other enterprise functions. It’s time to take talent back.