The Future of the Insurance Industry

In recent years, the global business environment has been volatile to say the least and it will continue to undergo a number of pivotal changes and disruptions as we navigate this difficult, unfamiliar era.

Businesses in most industries have been largely impacted by unforeseen shakeups, strict regulatory practices, operational restrictions, evolving demographic trends and the acceleration of technological advancements.

Insurance is one such industry that continues to face a period of radical change and a complex set of new issues. With no sign of these major challenges slowing down in the coming years, how can insurers and the industry at large be best prepared to not only stay afloat but stay ahead?
In this article, I will be going through the main challenges and opportunities surrounding the insurance industry.

What is the Future of the Insurance Industry?

I will also be examining the main drivers predicted to impact and influence insurers over the next few years so that they can better plan for the future and leverage the methods and innovation needed for success.

People are now paying more attention to how the insurance policy is being worded and they are trying to understand the terms, the conditions, and the implications, the exclusions that come along with their insurance policies. Here’s an example of an insurance company that’s doing really well to help their customers understand the terms and conditions, implications, and exclusions that go along with various different policies.

BankWest have turned their boring, old, lengthy word documents with terms and conditions into illustrations and diagrams and this is making it a lot easier for their customers to understand those terms and conditions.

Insurance products have always been perceived as being too complicated with very little clarity on what is included or excluded for the consumer.
What consumers want is products that are relevant to their needs and that are specific to their wants. They don’t want products that are unrelated to their specific requirements. With the ongoing pandemic bringing unexpected medical situations, job losses, and also cancellation of events, consumers and businesses are looking for needs-based insurance cover versus your traditional insurance covers.

Here’s a great example of a company that offers its users the ability to choose how they use their insurance cover.

Another challenge that insurance companies face and that is the digitisation of their front-end operations in the form of websites and apps that their users can access to open accounts and view their policies. Now, they also struggle with digitisation of their back-end operations in the form of automation because it requires specific IT skills and it also requires a change of culture within the organisation.

Now, if insurance companies can’t do both, digitise their front-end operations and the back-end operations, they will find it hard to compete with the neo-insurers out there that offer these type of services to their customers and then, that means that they will not be able to offer customer service that can compete with these companies.

With a growing push towards smarter technologies such as contactless services and real-time claim settlements, it calls for a robot integration of fraud detection and cyber policing. And when insurance claims start to increase, the industry believes that a massive amount of that will be aided by AI – artificial intelligence.

There is a challenge and this challenge might be counterintuitive. In a technologically driven world which is filled with digital enhancements and digitisation, the human element is become even more critical. We need agents, our customer service team to be able to provide emotional support to our customers that are on claim. We need to free them up from doing mundane administrative tasks to doing what is important and that is helping our customers get through their claim process and to get themselves better.