Innovations and advancements in the technological field have changed all our methods of living. The planet earth is experiencing a rapid transformation in terms of technology and lifestyle. Not only has this technical tornado hit the lifestyle choices of the people, but it has definitely changed the businesses practices.
The technical advancement has taken over the insurance industry as well. However, with the changing business methods, people’s expectation from insurance has also changed a lot.
In this article, let’s have a look at some trends we are expecting to witness in 2019 regarding the insurance industry.
1. Digital and omnichannel:
Yes, digitalization has the most significant impact on the insurance industry. With the changing technology, the customers are more into digitalization of service. So how the insurance industry is taking this change? Well, according to us, it has been taken by the industry positively.
The main reason behind accepting this digitalization demand is that the customers are getting more aware and educated. Now the customer demand not only the customized services but also more integrated and customer-centric communication.
So catering the customers’ demand more preferred services and customized communication, the insurance companies will move towards digitalization to become Omnichannel service provider.
According to EY.com, almost 80% of the customers voted for the more digitalized and better communication between the customers and the insurance companies.
2. Big Data And Analytics:
With the increasing number of social media platforms and enhanced data availability, insurance companies get the chance to leverage more knowledge to enhance their profitability and business yields. However, they have yet to choose the best possible channels for the collection of consumer data and decide what kind of organizational changes do they have to opt for analyzing such high data.
To better utilize and analyze data, in 2019, we will watch the growth of user based insurance, which uses user data available online to cut the cost substantially.
3. Legacy System Transformation:
For better collaboration, improved processes, and reduced costs, insurance companies need to transform their core business functions. With the increased trend of robotic process automation, more companies have invested in rules and tools systems. So, they are extending these systems across the whole organization for improved working and cost-cutting.
With the use of robotics and software as a service (SaaS), insurance companies are all set to minimize the errors and bringing efficacy and efficiency in the overall service delivery.
Some market development trends we are expecting to witness in 2019 are:
- Implementation of robotic process automation and Software as a Service for significant cost-cutting
- Using agent-facing application and portals, to extend systematic platforms and improved applications.
Whenever the business shows their enhance dependency on online systems, risk of cyber-attacks become more obvious. Although we have mentioned above the systematic changes that will transform the future of the insurance industry, however, we have to prepare for the negatives.
What we believe is that the plan of action of insurance companies against cyber-attacks should not be defensive or reactive instead they should opt for a more proactive strategy formation.
According to the information security survey conducted by EY.com, 16% of the survey respondents were of the view that the cyber-security system working in their organization is up to the mark. However, 59% of them discovered significant incidents within their organization.
Here we want to add that the occurrence of such incidents has increased many folds from 2015 to 2016 where almost 586 million worth of data was stolen because of the security breach.
To combat the increasing data, brand and reputational risk, blockchain technology has paved its path in the insurance industry. For 2019, we will witness some corporate level implementation of this technology including
- Proactive threat monitoring
- The enhanced trend of opting for Cyber Insurance Premiums
- Implementing Blockchain technology for more enhanced risk mitigation.
5. Insurtech And Blockchain
The words InsurTech and Blockchain offer not only the increased customer expectations but more pressure for fair practices and transparency. For 2019, insurance companies are more likely to work on the following few market development strategies to enhance their consumer engagement, transparency or processes, and improved security systems.
- A more focused and improved application introduced for more intuitive and digitalized customer experience and focused approach to problem-solving.
- A more regulated implementation of Blockchain technology for more secure transactions and information sharing among various partners.
- Implementing a global Blockchain for a more secure and safe information sharing channel.
- According to the FinTech Adoption Index of EY.com, 18% of the digital application user perform various transfer activities using digital technology.
- Almost 8% use the digital technology for the insurance-related transaction while 6% have used FinTech technology for the borrowing purpose.
- Whereas 17% have used the FinTech technology for dealing in the stock market.
The changing technology is forcing the businesses to transform their business practices accordingly. However, with the more digitalized business environment, we are more exposed to cyber-attacks and security breaches.
We are optimistic about the future, and we always have to be as there will be more integrated business practices with more improved security and enhanced data monitoring for the mitigation of risks.