The insurance industry is expected to undergo significant changes over the next five years, driven by advances in technology and changing consumer needs. Here are a few key predictions for how insurance will evolve in the coming years.
Increased use of technology and data analysis: Insurers are increasingly turning to technology and data analysis to improve their underwriting and pricing processes. According to a report from Accenture, "advances in data analytics and artificial intelligence (AI) will enable insurers to identify new opportunities for growth, improve underwriting and pricing, and better serve customers." This is expected to lead to more accurate and personalised insurance policies for consumers.
Growth of insurtech: The insurtech industry is also expected to continue to grow over the next five years. According to a report from Deloitte, "the insurtech sector is maturing and moving beyond experimentation to real-world implementation." This is expected to lead to more competition in the insurance market, as well as new products and services that better meet the needs of consumers.
Shift towards digital channels: Consumers are increasingly turning to digital channels to purchase and manage their insurance policies. A study by PwC found that "the growth of digital channels is putting pressure on insurers to improve their online and mobile offerings." This is expected to lead to a greater focus on digital customer service and the development of new digital insurance products.
Increased focus on sustainability: As concerns about climate change continue to grow, insurers are expected to place a greater emphasis on sustainability. According to a report from Marsh, "insurers will need to consider how climate change and sustainable practices will affect their operations, products, and services." This is expected to lead to new insurance products and services that focus on reducing the environmental impact of businesses and households.
Remote monitoring and telematics: Remote monitoring and telematics technology will be increasingly used to gather data on people and property in order to assess risks and offer more accurate insurance pricing. According to a report from Markets
andMarkets, "The use of telematics in the insurance industry is expected to increase, as it enables insurers to gather real-time data on drivers and vehicles and offer usage-based insurance policies."
Overall, the insurance industry is expected to undergo significant changes over the next five years driven by advances in technology and changing consumer needs. Insurers will need to adapt to stay competitive in this rapidly changing market.
Accenture report: "Insurance 2020 and beyond: Embracing disruption"
Deloitte report: "Insurtech: From hype to reality"
PwC study: "Digital insurance: A catalyst for change"
Marsh report: "Sustainability in insurance: A catalyst for change"
MarketsandMarkets report: "Telematics in the insurance market - global forecast to 2022"