What Are The Key Trends in Insurance Right Now?

Every now and then IE likes to look at key trends in the insurance sector, because of there’s a gap in the market, then the industry can plug it. Sometimes plug `n’ play it too. Here’s some insights for you;

TRAVEL

It’s obvious after Covid that demand far outstrips supply when it comes to overseas holidays, not just in the UK either. But Europ Assistance identifies that holidaymakers want specific Covid and flight related cover. The recent problems at Dublin, Heathrow and Madrid show this is a european-wide problem of staff shortages, plus some extra layers of admin regarding non-EU travellers in order to highlight the benefits of remaining in the EU.

The opportunity for travel insurance brokers and insurtechs is on-demand cover, that specifically covers the various components of the trip, at differing price points. As ever, personalisation is the key to success.

AUTOMATED SYSTEMS

There is still a way to go on automated claims settlement, MTAs and fine-tuning the insurance pricing process – especially in a time of hyper inflation. In the middle of every AI powered process is the customer and the challenge is building automated systems that interact in a human way. Greg Williams from Acrisure has these thoughts;

“Technology has accelerated our analytical capability. At the same time, there are areas where humans will always excel, such as forming and maintaining relationships. Together, “human and AI” allows businesses to anticipate customer needs at unparalleled speed and efficiency, while delivering the service and support that only a person can provide.

Organizations that fail to innovate will be left behind. Here at Acrisure, we are constantly looking for ways to leverage our technology platforms for client success. Likewise, our world-class technology and AI teams are always seeking input from client-facing colleagues to ensure our offerings deliver results and better connect our solutions, which include Insurance, Real Estate, Cyber Services, and Asset & Wealth Management.”

SAAS

Tarmo van der Goot, VP EMEA at Chargebee offers some insights on how SaaS can enable PAYG, on-demand cover;

“In an ever changing SaaS landscape, now more than ever, it’s important to find the right balance between burn rate and growth rate. Growth and profitability will be the norm, and a success formula going forward. Insurtech companies – particularly brokers and agents – are at forefront of making these changes, combining the service of insurance with the flexibility of SaaS to make PAYG models possible, in what has always been a more traditional industry.”

ESG AND NET ZERO ACCREDITATION

This is a massive opportunity for the industry. From refurbishing cars, buildings, commercial premises or everyday electronic products to huge infrastructure projects like HS2, hydrogen plants or battery farms, it all needs cover. This is a sector where all mainstream politicians have jumped on the bandwagon and are spending taxpayer cash like a drunk in a casino, so insurance brands can partner up with public sector departments on the big stuff, plus create flexible insurance that covers circular economy start-ups.

Then the re’s the issue of compliance. Global standards on ESG reporting and the definitions of Net Zero approved projects are being gradually applied to the markets around the world. Even Ping An has signed up to Net Zero. This means brokers, MGAs. repair specialists, law firms – every company in the insurance value chain will need to be ESG compliant in the future. For companies, protecting their ESG accreditation credentials will be crucial as regards contracts and distribution of services.

As Bart Patrick, Chief Revenue Officer at Genasys Tech notes;

“ESG related insurance is set to boom, which is all going to be tied to increasing regulations on marketing, distributing and making products. Losing your accredited ESG rating will be a big risk in the future for any business.”

UK HOUSING COVER GOES WAY BEYOND BUILDINGS & CONTENTS

Like travel, demand outstrips supply, partly due to the mass migration policies of UK governments over the last 25 years, but the UK is also a great place to work and study, which attracts hundreds of thousands of people every year and they all need somewhere to rent during their stay.

IE can see growth ahead for disruptors like GetSafe and Urban Jungle, as extras can be bolted onto basic Contents cover to suit peoples’ lifestyles. It’s also likely that working from home is here to stay, so insurtechs that come up hybrid policies will score success in the market. It could be storing stock at home for deliveries, or a Vinted operation, or high value computer and camera equipment for vlogging on TikTok, the opportunities are there.

For bigger players the new development of both greenfield and brownfield sites offer specific cover challenges that demand solutions. Net Zero targets on new homes mean new risks, as tech like hydrogen boilers, smart chargers, video doorbells, heat and humidity sensors transform the overall risk profile of the average UK home. Then there are co-living projects in bigger cities, with the risks of fire, escape of water, theft and legal disputes to consider.

As the UK population not only expands rapidly, but ages too, insurers have an opportunity to help manage active lifestyles via village type projects. Legal & General are trailblazers in this market and IE spoke to Andrew Kail, CEO of Legal & General Retirement Institutional (LGRI) recently who sees insurers in the future offering more choice to homeowners;

The ability to allow people to downsize, re-locate or stay in the family home is all about choice. L&G has found that many people want to free up cash to help family members get on the property ladder – insurers can help them do that. Legal and General has also found that health tech is growing fast, we see wearable devices offering help to people as they live independently in retirement villages for example. But L&G is also committed to levelling up the UK social housing stock and we are working closely with Councils and other companies to build more environmentally efficient homes and refurbish older, eixsting housing stock.”

MOTOR IS MORPHING INTO VALUE-BASED DATA

LexisNexis is seeing the value of overlaying key pieces of data. So for example cross-referencing one factor like 30 day cancellations, with another like postcode of Proposer, or modifying Occupation more than 3 times during the quote process, can give any insurance brands a heads up as regards risk and pricing.

This is a perfect example of useful data, or data analytics, rather than just amassing vast swathes of data for the sake of it. IE can see more value based insurance products ahead in the Motor market and by that we mean cover that is priced on particular data points, so it becomes a kind of Google algorithm. If you look at Tesla’s insurance, it is underpinned by the driving experience, then that daily data story is layered up, compressed and crunched, to give an overall risk equation; ten thousand miles of this type of driving will produce X times incidents, given Y type road conditions.

So, add in the great resignation from car ownership, and the government backed trend towards EV/e-scooter renting on-demand, especially in urban areas. What insurtechs, MGAs and underwriters need to develop in future is insurance that calculates the value of the asset being used, cross-matched to the risk profile of the hirer – all at the point of quote. Every part of the value chain needs to be priced accurately; the journey, the vessel, the captain of the ship, the passengers and cargo. Plus the estimated repair, storage, hire and legal costs if there’s a claim involving a third party.

That’s what we mean by value based car cover, because when you no longer own the vehicle, your attitude to risk changes. What’s really important then are things like injuries, inability to work, injury to passengers, or loss of holiday, business equipment, earnings etc. Motor will gradually evolve into insurance that is as much about the associated risks of mobility, as it is about the vehicle and any damage, or loss of vehicle.

FINAL THOUGHTS

The insurance brands that can use tech to underpin efficient, customer-centric platforms will win consumers over for the long haul. It won’t need an FCA regulation to persuade customers to stick with insurers that pay out 100% of genuine claims rapidly, sometimes with minutes.

In a time when fuel, food and travel are being rationed, the insurable value of each trip increases.

Meeting globalist targets on climate can’t replace meeting business efficiency targets.

Insurance is a utility, that people can switch on and off depending on how they perceive the value of the content.

 

 

 

 

 

 

About alastair walker 8997 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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