A lot of sectors have been exploring possibilities on how to personalise their customer’s experience. The main reason for this is to make an effort to cope with the current health crisis. All around the globe, there are structural changes across sectors and the insurance industry is no exception.
The most effective communication channels during the pandemic are mobile apps, messaging platforms & chatbots. Multiple reports from several sectors forecasted that AI’s initial impact would primarily relate to improving efficiencies and automating existing customer-facing underwriting and claims processes.
Over time it is predicted that AI impact will be more far-reaching, it might identify, assess, and underwrite emerging risks and identify new revenue sources. It will be able to impact nearly every aspect of the Property and Casualty insurance industry.
Demand for custom products, such as, for example, business-continuity cover for small enterprises, or pandemic insurance, and eventually event-cancellation policies, will definitely soar. P&C insurance and Commercial insurance will face different types of claims.
Doing business in the insurance industry will change, as doing business is changing in all industries in all sectors within the last decade. Insurance brokerage will be all digital, but already there are so many changes that are inevitably leading us to the up-to-date modern insurance agencies. One of the best examples is self-service applications, which are literally your portal to all policies, documents, pink-slips, etc. Customer support is becoming so personalized 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 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 question and rethink the offer is to survive and thrive in the business. Property and casualty insurers (as many other specialists) 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. Even now, a lot of companies are relying on their partners and integrations.
One of the changes that already happened is that the insurance sector is affected by the more advanced use of triggered email campaigns.
Triggered email campaigns
Studies show that computer that are using triggered emails enjoy around 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
Let us focus on customer satisfaction. The simple stipulating a contract through mobile devices provides us the ability to combine the physical and digital experience, and to provide customers unique, highly-personalized experiences. Less time is lost, and some reports even forecasted that AI’s initial impact will primarily relate to improving efficiencies and automating existing customer-facing underwriting processes.
One of the most important facts is that some 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
If the movement of people reduces, that will incentivize insurers to create usage based coverage. We can already conclude that working remotely changes the requirements and specifications of many insurance types. Digital forms, easy to download and easy to store claims and documents are something that is already highly requested, and will become mandatory in the near future.
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. Why? The Eco movement is finally pushing all industries to become more aware of the different types of pollution we all produce. The idea is for sustainable insurers to strengthen their brand and update fast.
Commercial insurance will be impacted as well, even though it looks like it’s on a long stick. But think about this from the car insurer’s perspective. They 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, 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
A lot of carriers started adding cryptocurrencies to their investment portfolios.As we already know, MassMutual invested US$100 million in Bitcoin for its general investment fund. This will be definitely widely popular in the next decade.
Life and health insurances
Life and health insurance will always be important to most of the world’s population. Now, during COVID, these insurance might be of use more than ever. Carriers that quickly establish a strong presence across the health ecosystem will gain a big advantage over competitors. And the new players need to act fast and follow the latest digital trends in order to catch-up or surpass the global ones. 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 2022 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.