A new decade has arrived, and at VouchForMe, we’re excited about the future. Expectations are that 2020 will bring significant changes to the insurance industry. We’ve decided to take a look at what this year has in store for insurance companies and how VouchForMe can be used to drive these changes.
The insurance industry today
Despite challenges in the global economy, the insurance industry is thriving today, with growth in all major markets. Premiums have increased from previous years, which has helped to drive profits. However, customers are noticing these price increases, and with the fear of an economic recession in some major markets, business customers are looking at all options to cut costs.
The growth of the car insurance industry is driving innovation, with financing for InsurTechs hitting a record high of over $3261 Million in 2019. (Deloitte) Insurance companies are seeing the benefits of integrating new technology to ensure they stand out from the crowd.
Here are some of the trends we believe will be the most important for the insurance industry going into 2020.
Looking to the future
Personalization and data
Data has been at the heart of many industries for the last few years’ and insurance companies are seeing the value. Crucially 88% of consumers expect personalization from insurance companies.(AugustaFreePress) By collecting customer data through various methods such as the Internet of Things, connected cars and black box trackers, insurers are able to build up a more accurate profile of their customers, helping them to tailor prices, advice and types of cover. With this shift insurance companies are recognizing that to attract and retain customers, they need to view them as individuals rather than as segments. Personalization, which is at the heart of VouchForMe’s peer-to-peer model, is expected to lead to better coverage for customers and more accurate risk assessment for insurance providers.
With a massive 60% of customers worldwide unhappy with their service providers, (Altexsoft) increasing customer satisfaction is vital to ensure that companies aren’t left behind. By adopting new digital strategies, companies can automate time-consuming tasks, reduce fraud, and ensure that they stand out in a competitive market. Digitalization has improved customer experience on the VouchForMe app.
AI and Blockchain
AI and Blockchain are set to revolutionize the insurance industry. AI allows companies to automate claims management leading to lower costs and faster claim processing. Blockchain technology allows secure data management, which will enable insurance companies to easily identify fraudulent claims, provide a verifiable record of any claims information, and reduce operating costs.
Due to increasing customer demands and the consequent rise of solutions, insurance companies can no longer rely on organic growth or advertising to attract new customers. Rather than trying to compete slowly on price, which only leads to a race to the bottom insurers need to start looking at the problems customers face and solve them through innovative products. Partnerships with startups will drive industry growth. (Deloitte)
Recognizing the changing needs of customers, especially younger tech-savvy consumers, will be crucial for success in the coming year and decade. Customers are demanding more transparency, better service, and new solutions. While the insurance industry has traditionally been a slow adopter of technology, this is set to become the norm, as companies that fail to embrace technology will find themselves left out.
With a record investment last year in InsurTech, insurers should focus on building partnerships with innovative startups, which can provide solutions for customers’ problems, spot growth opportunities, and free up agents to spend time with customers.
By adopting new technologies such as VouchForMe’s social proof model, insurance companies can provide solutions to consumers and remain relevant to commercial and consumer markets.
AltexSoft. (2018). Insurance Technology: 11 Disruptive Ideas to Transform Traditional Insurance Company with Machine Learning, APIs, Blockchain, and Telematics. [online] Available at: https://www.altexsoft.com/blog/finance/insurance-technology-7-disruptive-ideas-to-transform-traditional-insurance-company/ [Accessed 15 Jan. 2020].
Augusta Free Press. (2020). Top 5 car insurance trends for 2020. [online] Available at: https://augustafreepress.com/top-5-car-insurance-trends-for-2020/ [Accessed 15 Jan. 2020].
Friedman, S., Canaan, M., Gokhale, N. and Ashani, P. (2020). 2020 insurance outlook. [online] Deloitte Insights. Available at: https://www2.deloitte.com/us/en/insights/industry/financial-services/financial-services-industry-outlooks/insurance-industry-outlook.html [Accessed 15 Jan. 2020].
Www2.deloitte.com. (2020). [online] Available at: https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/financial-services/deloitte-uk-insurance-trends-2019.pdf [Accessed 15 Jan. 2020].