5 Top Trends Shaping The 2024 Insurance Landscape
Like the holiday serving platter overflowing onto the dinner table, satiating our appetites, and building the excitement for all that is to unfold in our lives this new year, so too are the platter of abundant choices available to customers across the insurance domain. From tech-enabled processes to insights-driven engagement and tailored reinsurance services, the abundance is apparent, yet one that should be tempered with reasoning and intelligent choices. The insurance industry is facing an inflection point- the build-up of InsureTech-led AI initiatives over the years has brought us to a threshold of a buffet of seamless experiences. However, to utilize them effectively and capably, other factors such as ethics in AI insurance, value creation, granularity in decision-making, and precision in insurers’ choices will unveil what can be looked forward to in how the rest of the year follows. Based on our experiences, research trends, forecasts, industry talks, and discussions, below is what we foresee for this year regarding how the insurance industry will unfold.
1. Innovation and transformation will be at the core of value-driven services. Change is happening all around us at a pace more rapid than in all of the preceding decades.
Significant shifts in climate, the workforce, technology, and customer expectations combined with the constant geopolitical volatility and macroeconomic conditions are compelling organizations to pivot quickly. They must adopt technological infrastructure, change business models, and adapt to new organizational culture to remain relevant, boost profitability, and survive. While this means businesses must think independently, they must constantly reinvent and adapt to the marketplace. With insurance being society’s financial safety net, the growing volatility worldwide and financially unsupportable risks are mandating insurers to play a more significant role in managing catastrophic climate change, growth of cybercrime, and constant disruptions across sectors like automobile and commercial insurance intelligently. Preventing and mitigating risks will depend on the insurer’s ability to pre-mediate, predict, and be ready at all times for any eventualities that may arise in the foreseeable future.
2. The intersection of technology to optimize business processes for all stakeholders – With a mainly retiring workforce, ‘quiet quitting’ of employees across insurance lines, and manual interventions being unable to keep up with the claims volume, technology is seen as a game-changer in this transformational change.
With the adoption of new technologies like generative AI, predictive analytics and others that can harvest actionable insights from past claims data, the playing field for talent to merge with data sources and skill sets is vast, with significantly transformative results.
3. The ethical impact of AI application and its use.
The growing use of AI by insurers and customers raises new concerns about its usage and practical implications. Emerging challenges and opportunities are presenting various questions. With insights-driven data and a tool that can potentially transform the insurance space, ethics will play a significant role in leveraging it within compliance and other regulatory parameters and its impact on the larger good of the insurance industry.
4. Growing awareness of personal risks as a potential opportunity for insurers.
Coupled with rising inflation, citizens across the board realize their responsibility for their future health and retirement costs, a fallout of governments in advanced economies becoming more indebted and funding paucity for health and retirement programs (the United States Social Security program is experiencing funding gaps – Global Insurance Report 2023). Insurers can use such information to develop new products to bridge this coverage gap.
5. Rise of embedded insurance to significantly disrupt the industry.
There is an increase in insurance premiums in the property and casualty businesses in third-party channels. This will dramatically affect insurers by bypassing insurance agents and other traditional sellers, causing chaos in direct-to-consumer insurance sales, and may even exclude legacy carriers altogether. With growing premiums across markets (US forecasted to be $722 billion by 2030, Deloitte), partnering with embedded parties or finding ways to tackle such service providers is the next big step. Auto insurers will likely have this as the most significant challenge this year.
CONCLUSION
Customer centricity and business efficiency are the two driving needs in today’s insurance industry. Generative AI, predictive analytics, no-code / low code applications, APIs and others are lending significant advantages to the insurance value chain with their capabilities of data-driven insights, streamlining and optimizing workflows, and enhancing workforce productivity. Their intelligent adoption will depend mainly on insurers discarding a myopic understanding of customer pain points to gain a more extensive, macro view of their enterprise data capabilities. Whether obtaining such tech-capabilities in-house or from outside vendors, such Insure-tech initiatives, will only help further the industry’s mission and vision for the future while focusing on environmental and economic impacts without compromise on profits.
About Charlee.ai
Charlee.ai is a patented, predictive analytics platform solution that uses natural language processing (NLP). Charlee.AI enhances and shortens claims workflows, helps reduce severity, litigation, managing reserves and fraud efficiently for P&C carriers/MGAs. Watch our video here. Visit us at: www.Charlee.ai
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Written by: Dr. Charmaine Kenita
Technology and Business Writer
