3 Insurance Trends to Keep on Your Radar in 2018
The insurance industry is undergoing major change. Findings from Deloitte’s 2018 Insurance Industry Outlook highlight key opportunities and threats for insurers to consider—both now and into the future. These include:
- Evolving digital technologies and products.
- Shifting customer expectations.
- Emerging data and the Internet of Things (IoT).
As a result, insurers are now forced to rethink traditional models amid new competition and changing consumer needs. Whether you’re new to insurance in 2018 or a seasoned pro, we outline three insurance trends to keep on your radar in 2018 and beyond.
Digital transformation in insurance presents an immense opportunity to reshape how products and services are delivered. By embracing digital innovation, insurers are able to improve program efficiency and effectiveness in underwriting, customer service and claims management. Additionally, insurers that adopt a modern, digital program report a 65% reduction in costs and a 20% improvement in conversion rates.
On the consumer side, policy holders enjoy connectivity amongst smartphone, car, household and workplace devices. This interconnectivity enables industry leaders to streamline insurance operations, while modernizing and personalizing customer interactions.
For example, Ohio Insurance Institute member Nationwide tapped Amazon Alexa to encourage safe-driving habits, help drivers lower their insurance premiums and provide access to personalized driving information. Additionally, the program provides consumers with access to timely product and service information and ongoing communications with agents.
Insurers that can let go of dated, traditional methods in favor of a more digital landscape will have the upper hand against the competition.
2. Consumer Behavior
A growing reliance on smartphones, mobile apps, social media and chatbots has not only impacted the insurance industry, but also the consumer. Insurers are now faced with meeting the demands of millennials who make up the largest generation, and are in search of insurance plans and options.
Today’s digital-reliant consumers expect both convenience and personalization from their insurance providers. They seek high-quality customer service across the channels they frequent the most, not just the insurer’s website or an 800 number. And, millennials are spending more time researching online versus old-school tactics. Think a shift from calling a sales rep to 100% online transactions.
But according to Accenture’s report, Satisfy the Craving for Insurance Personalization, “only 22% [of insurance providers] have launched personalized, real-time digital or mobile services to date.” These include:
- Suitable offers and discounts based on consumers wants and needs.
- Relevant and timely messages that strengthen the consumer/insurer relationship.
- Dynamic pricing models for consumers’ habits and lifestyles.
- Applicable coverage recommendations and incentives for risk management.
Insurers that offer an array of interconnected services and products—online, over the phone and in-person—will differentiate themselves in the market, and attract and retain omni-channel consumers.
3. The Internet of Things
Historically, the insurance industry has relied on risk assessment to calculate policyholder coverage. The IoT, however, could change that. With in-home and automotive sensors, as well as mobile and telematics devices, insurers can transmit consumer data to more accurately access risk, manage claims and price policies.
As a result, insurers have a better understanding of consumer wants and needs, and can individualize service and product offerings accordingly.
As technology and consumer behavior continue to evolve, insurers’ business models must respond accordingly. What trends are you prepared to tackle in 2018? Share with us in the comments below.