We are into February already, so let’s take a look at the top insurance trends of the year so far.
THE TIME OF THE ESG INSURANCE BRAND IS HERE
Environmental and Social Governance is a globalist policy which is being implemented across developed economies rapidly. It makes sustainability targets and Net Zero statements pretty much mandatory within corporate reporting and in some ways, it will restrict investment – and even coverage – for insurance brands. Coal, gas and oil are good examples of this trend, as a small minority of activists effectively cancel cover for projects or industries they don’t like.
Insurers themselves will change slowly, they always do. But brokers and MGAs have an opportunity to apply greener branding and marketing to existing products, using the latest technology to tick the right boxes. As intermediaries and retailers MGAs/brokers have a vital role to play in product distribution and selling products to the end user.
A recent report by McKinsey highlights how insurtechs are often focused on the marketing of insurance products, and the report identifies that intermediaries and brokers have a chance to spot new risks, emerging trends and ESG/compliance related issues, then respond to them.
Read more here.
If you look at how many insurance brands are now making ESG appointments at C Suite level, you can see that riding this green gravy train will be profitable in 2022 and beyond. In the UK especially, the huge social housing/apartments boom, plus conversion of retail & commercial into housing units, offers a massive opportunity for insurers to provide cover on construction, recycling, EV charging points, monitoring of tenants using sensors, CCTV, audio, bicycle/scooter hire, energy capture and distribution etc.
WFH IS ALSO A START UP OPPORTUNITY
The pandemic has actually empowered many entrepreneurs in the UK, giving them a chance to take stock and consider whether working 9-5 and commuting every day is really the best fit for their dreams and lifestyle. Plus, the demand for skilled repair persons has never been higher. But starting any business requires insurance cover, even when working from home. How can brands meet this new demand? One solution is embedded cover, which can match things like specialised tool or vehicle hire.
Devin Chawda, co-founder and CEO ARMD has these thoughts;
“The pandemic has changed many things over the last couple of years, with many more people working from home and spending their money on home improvements, as holidays have been out of the window. This has led to an increase in tradespeople according to ONS figures, including apprentices drawn to the trades, as an attractive, well-paid alternative to office or factory life.
More tradespeople mean more tools, which need protecting and require insurance. However, the traditional insurance route is broken, with mutual distrust between tradespeople and insurers. Even when tradespeople can get insurance, it is often expensive with unreasonably restricted coverage, e.g. no tools in vans overnight. And when there’s a claim it often takes ages to get settled, if at all. During this time, tradespeople are not earning as they don’t have tools to work with. A disaster.
Fortunately, InsurTech ARMD has created a solution, which is filling the protection gap for tradespeople. It’s an innovative embedded insurance solution, with IoT devices that boost security and reduce losses, enabling insurance partners such as RSA to profit, while making premiums more affordable for tradespeople in this £6.5bil underserved market.”
AI CLAIMS SETTLEMENT NEEDS MACHINE VISION
John Swigart from Pie Insurance in the US, has identified machine vision as being a crucial tool, which will enable insurers to accurately price risk, assess claims damage and more.
“Having worked in the insurance industry for over two decades, I’ve seen firsthand how resistant to change traditional insurance companies can be, especially in undertaking digital transformation. However, the industry faces an increasingly complex operating environment, and because customers now expect an affordable and simple experience, insurers can no longer compete under bygone processes. Many insurance leaders are seeing how insurtechs use technology, data analytics, and digital innovation to streamline and automate all aspects of the insurance process, from quote to claim.
In 2022 and beyond, one prediction I foresee gaining traction within the industry’s digital awakening will be the increased use of machine vision, the AI-based analysis of images.
Machine vision creates an opportunity to apply AI to pictures and can unlock enormous amounts of otherwise unknown visual data to help insurers sharpen risk assessment of potential policyholders. Machine vision dramatically expands the amount of data insurers can collect and process, resulting in better, more granular and bespoke pricing, ultimately allowing us to pass on value to customers. With additional data, insurers from both personal and commercial lines will be able to better automate, scale, and enhance risk evaluation while reducing costs and increasing operational efficiency for customers.
Adapting to digital innovation is now a business imperative for the insurance sector and the only way to succeed is by leveraging technology and data effectively. New technologies, like machine vision, present insurers with an enormous opportunity to improve efficiency and accuracy of underwriting and pricing.
US VIEWPOINT ON PI CLAIMS
“In workers compensation, claims can remain open for months or years. Some of our injured workers are struggling with life-changing injuries and we often form strong relationships with them. Some of the bravest people I’ve known in my life are injured workers overcoming terrible injuries. The important work of supporting the people facing these circumstances can’t be and shouldn’t be entirely handed off to automated processes. I’m sure we’ve all experienced how frustrating and ineffective those processes can be, even more so for people facing a frightening and confusing situation.
It’s much more useful to think of developing sophisticated software to provide superb support to the adjusters, nurses, and others who are engaged in this important work. That’s why at Omaha National, the proprietary software that we develop in-house is our Oncore application, which is used by our employees to perform their vital work at the highest possible level.” -Reagan Pufall, President and CEO at Omaha National.
TRENDS TO WATCH
Insurance Edge thinks these are the big growth markets in 2022;
On demand health consultations & treatment – the NHS will continue to absorb billions and fail to deliver.
Battery pack Cover for EVs – early electric car adopters now realise their battery will fail in 7-10 years.
Mobile homes/Caravans – Covid has taught people they cannot predict overseas travel rules. Solution? Control your own holidays.
Data driven Contents cover – Tenants will never insure landlord’s fixtures & furnishings. So cover vinyl, jewellery, handbags, watches etc. instead.
Classic vehicles – All that furlough cash has sparked a classic car/bike boom, utilising tech to track agreed values is the way ahead.
Personal Cyber – As UK governments promote China style Social Credit/ID, people will need to protect their identity & data from hackers.
Recycled Products – Refurbishing and repair is the greener option, so insuring vehicles, electricals & more is essential.
Have a double busy 2022 everyone.