across the world
2020 Insurance Industry Trends: Shaping The Future
With the continuous growth in the insurance market, it is getting essential for insurers across the globe to revamp the entire business system in order to fulfill customer needs that are invariably evolving. Moreover, owing to the emergence of newcomers following new business models while offering non-traditional services in the industry, big, old, and established insurance companies and agencies are forced to assess and reshape their strategies to raise their game.
Additionally, with a wholly changed market structure, customer expectations are at the peak where they are expecting the same online experience year-around as they usually do from prevalent e-commerce giants like Amazon & Best Buy.
The insurance market and customer demand will continue to change and grow, respectively, due to which some difficult-to-avoid trends are emerging in the industry; let’s discuss them.
7 Insurance industry trends that are shaping the future
1) Keeping Up with All the Generations
Millennials (Born 1981-1996 (22-37 years old) and Generation Z (born between 1997 and 2012, ages of 7 and 22″ in 2019) have entirely different expectations than Generation X (Born 1965-1980 (38-53 years old) and baby boomers; (Born 1946-1964 (54-72 years old) the former generations prefer insurers who prioritize global consciousness and digital engagement.
Many new digital-driven insurance companies have made a great start by serving this vibrant age-group. However, currently, a major part of the market is still within the grasp of traditional insurers.
Larger companies that have no deficiency in resources have already developed their work processes and systems to serve all the generations with the best. However, as changing or entirely replacing the core system is usually costly, most insurers are heading toward modernization gradually.
These companies are building and implementing numerous strategies to systematically replacing some manual functions with technological solutions (trending in the insurance industry), initially in the areas of claims management and payments to enhance the customer experience.
2) The Blend of Human and Digital Solutions
Delivering excellent customer service is the top priority for most insurers, for which they are utilizing their best human resources in combination with digital solutions. This helps them make a balance between empowerment, personalization, and efficiency at each touchpoint customers use throughout their journey.
Customer experience strategies must cover multiple factors to accommodate a wide range of consumer preferences. For this, many insurance companies are making efficient use of technology with a human touch.
Hyper-personalization is becoming a necessity in insurance, and you can achieve it only by analyzing data in detail, enhancing communication systems, adopting modern digital technologies, and making your workers efficient enough to use them wisely and productively.
3) The Always Growing Smartphone Dependency
“The vast majority of Americans – 96% – now own a cellphone of some kind. The share of Americans that own smartphones is 81%.” Source
Considering the number of Americans using smartphones, mobile functionality is one of the top priorities for most insurers. Actually, 74% of insurance companies are already offering mobile apps for the convenience of their customers. However, many companies provide mobile-friendly websites using which prospects can request quotes; policyholders can sign up and access their accounts, pay premiums, file claims, renew policies, etc. from their mobile phones.
Consumer expectations are changing and growing pretty much along with the changes and development in technology. As a result, the modern interface of a website or mobile application might soon become tomorrow’s fossil. Thus, insurers need to keep themselves updated with emerging web and mobile trends and upgrade the platforms (websites and apps) regularly while giving special preference to appearance, navigation, content, service pages, and clarity of information.
4) Advanced and Predictive Analysis
Unlike traditional data points such as age, gender, location, health records, driving records, etc., today (with the help of unlimited data sources) algorithms can include information from consumers’ education, family background, occupation, shopping habits, credit reports, social media behavior, and to name a few. Insurers can utilize all these advanced analytics for various purposes, such as personalized marketing, risk assessment, price optimization, claims prediction, fraud detection, etc.
The National Association of Insurance Commissioners (NAIC) is developing best practice regulations for using predictive analytics properly. Among other issues, NAIC is creating standards to ensure appropriate communication, accuracy, non-discrimination, and review procedures.
5) Automation: Friendly Technology
Lots of insurance workers are in a misconception that technology might replace them in a few coming years. Quite the contrary, it is no less than a big advantage that brings a lot more than just making your work easier.
Even though today chatbots are handling customer queries, predictive modeling is done using software, and payments are made automagically, some of the biggest digitally-driven insurance companies have support teams for customers who require help from a human representative.
Insurers are using automation solutions to minimize the efforts they used to put in rule-based processes that are usually repetitive, time-consuming, and prone to errors. Similarly, digital solutions are used to streamline functions comprising data analysis, reporting, reconciliation, etc.
6) Outsourcing – Bridging the Talent Gap
The insurance industry is undergoing an unusual worker shortage as aged employees are getting retired at a fast rate. Although at the same time, they are leaving vacant positions for ready-to-work candidates, new graduates are not showing interest in choosing insurance as a career option.
“Nearly 400,000 employees are expected to retire from the insurance industry workforce within the next few years, according to the U.S. Bureau of Labor Statistics.”
“44 percent of millennials do not find a career in insurance interesting, as per Valen Analytics.”Source
Outsourcing, surprisingly, is getting highly popular, and many insurance companies using it as a strategy to bridge the talent gap. Insurance business process outsourcing is becoming a trend that is emerging at a rapid pace in the industry because insurers get access to qualified, skilled, and trained talent at reasonable costs without hiring people in-house.
“The size of the global outsourcing market reached $24.6 billion in 2017 and is predicted to hit $220 billion by 2020, according to a report by Global Industry Analytics, Inc.” Source
7) One Company Covering All Major Insurance Policies
This trend seems unique, but it took years for it to reach there. Some insurance companies have been practicing this strategy for years, and today it is emerging quickly. It actually makes perfect sense to customers and delivers convenience to them, eliminating most hassles they encounter during their entire customer journey. By purchasing such policies, customers need not contact different insurers for different purposes.
Similarly, when a company has access to all details of its customers (including information about health, home, travel, car, pets, and assets), they become capable of providing multiple insurance policies for different purposes and flexible compensation covers when needed. No doubt, in the era of Big Data and Artificial Intelligence, it would be easier to automate most functions.
Because of today’s highly competitive business world, all major industries and markets are experiencing several minor to major changes. Companies that are choosing to welcome these trends are likely yo perform better than the others in their industry. However, increased customer satisfaction can only be achieved when trends are adopted wisely, and technology is used efficiently.
In the current era, investing in technology, hiring and training employees, and becoming updated with the insurance laws & regulations often become difficult for insurers. Do these challenges seem familiar to you? If yes, you might want to follow the trending strategy – outsourcing. You can outsource some of your back-office functions to Cogneesol and gain a competitive advantage over your competitors.
Cogneesol has been providing up to the mark insurance BPO services to clients worldwide for more than a decade. Our team is comprised of qualified, trained, and experienced insurance experts who can proficiently satisfy our clients’ needs. At Cogneesol, we utilize the latest and industry-standard technologies that help us complete projects timely while maintaining quality.
If you are looking for insurance BPO services at affordable costs? The solutions are just a call away, get in touch with us now – call us at +1 646 688 2821.
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