Three trends for insurers to watch in the post-COVID era
As we all know, almost every business, person and industry on this planet faced some form of disruption last year. This year, we’re all looking to find our feet and figure out what we can do to sustain our businesses and keep our customers happy while planning for a post-COVID era.
We can expect the insurance industry to take some major steps, and based on the insights from EIS’ Customer Compass survey and Insurtech Insights’ Insurer Compass report, we have distilled our top three trends to keep an eye out for the rest of 2021 and beyond.
Insurance industry is expected to take some major modernisation steps
The trends – the need for speed and personalisation
- The craving for digital transformation
We can expect to see insurance professionals accelerate transformation.
This is a trend we have already seen emerge last year, with 99% of professionals agreeing insurers must undergo digital transformation to remain competitive. However, 88% stated that legacy systems are preventing this transformation from happening rapidly enough.
There is a huge sense of urgency in the industry, and as part of the digital transformation process, companies are craving to become more data-driven and invest in corporate change, such as removing organizational silos, and cultural change that embraces innovation.
When asked their opinion on how investment in digital transformation will change for their companies in 2021, the majority (59%) predicted investments to increase in the year.
Do everything faster is the mantra for insurers who want to reduce customer churn and expand into new markets.
- The road to modernising customer experience
Most insurance professionals consider their industry to be “average” or “poor” when it comes to the customer experience.
Only 26% believe they are doing well in meeting their customer expectations even though it is vital to the future success of the insurance industry. Customers agree: only 49% consider their insurance provider responsive to their needs and 28% of policyholders cite poor customer experience as the main driver for leaving their insurer.
In the future, insurers will focus more on growing this market by simplifying the customer’s buyer journey and offering more products with flexible coverage options. To achieve this goal, insurers require a flexible IT infrastructure to adapt to their customers’ changing needs in real-time, and chasing this outcome is a trend that is likely to follow throughout this year, the next and so on.
- Going beyond protection and into personalisation
Many insurers have started to join forces with other businesses from different sectors to create more holistic coverage options and lifecycle bundles. These new propositions combine insurance and non-insurance solutions into more personalised offers that are be better suited to improve customer relationships than what protection products alone have been able to achieve.
86% stated they believe their ability to offer customer’s additional services which go beyond protection is essential to their future success. Consumers clearly have a huge appetite for this sort of innovation. For example, 58% saying they were interested in a mobility bundle including auto insurance, auto loans, buying or leasing options, remote monitoring, maintenance and driver safety guidance.
Over to you as insurtech drives the revival of fintech
So there we have it, our predicted top three trends for the rest of the year and beyond. Most of these trends appeared in the insurance industry before the pandemic, however we can now expect to see most, if not all, insurers take these changes up.
The increase in digitally-savvy consumers educated by the forced lessons of working from home and exclusively interacting online has accelerated the trend. It has reached a point where if your company is not actively trying to carry out these changes that are customer-focused, then it will surely be at a competitive disadvantage.
2020 has been a challenging year for fintech which brought job losses and down-rounds. The pandemic has elevated the role insurers play in our lives and as a response, investment has flooded into the insurtech sector, making 2020 the most important and indeed successful year in terms of funding according to Willis Towers Watson.
2021 will only build on the robust foundations for insurtech firms and could lead a revival for the wider fintech sector, keeping it ahead for the following years.
What do you think, what trends do you expect to see in 2021 and beyond for the insurance industry?
This research was based on the analysis of 1,057 consumers of insurance services in the GWI.
