Yes, we have more predictions for next year for you. These are by Mark McDonald from Altus Consulting, who has over 10 years experience working in Financial Services, joining Altus in 2018 focussing on General Insurance.
With a background in technology and significant experience across a variety of retail FS verticals, Mark works with clients on shaping business change and strategic development. Mark’s main interests are around the use of emerging technology to enhance customer experience and improve operational efficiency, particularly where there are opportunities to prevent claims, as well as keeping a close eye on the Insurtech industry.
We will see more partnerships between established providers and insurtechs
Hot on the heels of the Mini Insurance launch by BMW and Wrisk as well as the Trov and Halifax Insurance tie-up for Renters Insurance, I’m predicting more partnerships that will deliver on-demand, service oriented propositions to end consumers. I expect this to be through more activity across industry verticals to really build out ecosystems with Insurance as part of an overall product or service offering.
Use of data to simplify customer journeys and improve customer experience
Key to providing easy, seamless customer experiences will be the use of data to support propositions such as a quick quote or fast track claim – I expect to see more traditional insurers launching propositions based around this. Building on this, the wealth of IoT data shouldn’t be under-estimated and I’d expect to see some real product offerings coming to market that use IoT data in products to support traditional claims processes but also pro-actively preventing claims.
More M&A activity between established insurers and insurers and insurtechs
I expect there to be further M&A activity this year, following a number of acquisitions this year, we’re not seeing signs that this is slowing down. Insurers may be likely to spend money on acquisitions for insurtech firms with tech and operational capabilities that will enable them to deliver products and services that would take much longer (and cost much more) to build on legacy platforms.
An automated switching service for consumers
Will this be the year when an aggregator launches an automated switching service for end customers? With services already live in energy markets, can it be made to work in Insurance in 2020 – to do this, this will require not just a price comparison, but a product comparison service too, ensuring customers receive the same level of cover when moving insurers. If this happens, will it change the marketing behaviour of insurers to focus on the loyalty of existing customers and tackling dual-pricing head-on?
Impacts of a changing climate
As we look to the long term, the increasing regularity of extreme weather events will have a massive impact on property insurance – particularly as more claims of a greater severity can be expected. Historical data will no longer provide a consistent ability to predict risk, so I expect as we go through 2020 we will see the rise of insurers and insurtechs who use real time and near-real time data in risk models to support prevention of loss as well as during time of claim.
More Insurtech investment, but fewer insurtechs
Global insurtech investment is on the rise, with over $4bn having been invested in the first 9 months of 2019, greater than the whole of 2018. It could be predicted that this rate of investment will likely continue, however, I’d caution that we shouldn’t expect to see this spread evenly around the insurtechs. There will no doubt be some more big winners but we’ll also see some losers too, which could result in some insurtechs not securing investment and ultimately going out of business.