Key trends that will shape P&C markets

Disruptive technologies, increased competition and economic pressures are causing P&C to look beyond traditional strategies.

A change is taking place in the general insurance industry. In this change, some will emerge as leaders, many will be left behind, and another group may disappear from the market. The year 2016 continues with market disruption. What are the forces that disrupt the market? How it affects processes and stakeholders is already a hot discussion. Now let’s dig deeper.

First and foremost is disruption due to innovations and new product development. Innovations are great levelers and destroyers. Just look at the potential of IoT to change the insurance business. IoT is adding new tasks for insurers. Wearable devices, cars, transmitters, medical equipment, security systems, doors, lights, etc. are providing insurers with market segmentation and creating new pricing models for the insurance market generals.

The rise of the sharing economy where assets are shared is creating opportunities for property and casualty markets. This means insurance companies must create new pricing models to take advantage of those assets.

Are agents being replaced?

Digital technologies are throwing a monkey wrench into established property and casualty markets. Before digitization threatens, insurers employ agents to educate customers. But the growing phenomenon of digitization is slowly removing the key role that agents play as a medium between insurers and customers. For example, Google Compare helps customers compare different products online, where customers can buy the products directly from the insurer. This may influence the premium, as commissions paid to agents may be given as a discount to the client.

cyber security

Thanks to digitization, P&C customers expect personalized services such as anytime, anywhere access. This is making customers happy where Millennials are targeted, and at the same time opening up risks like cybersecurity and hacking. Such risks can affect the credibility of insurance companies. Today’s IT solutions come with additional built-in layers of protection to protect data assets.

telematics

The growing connected car with mobile telematics applications is redefining traditional pricing models. The traditional model is being replaced by usage-based insurance (UBI). This will allow drivers to obtain discounts on their behavior behind the wheel. The lower the risk, the lower the premium. This trend is opening up opportunities for mobile application providers to introduce premium features in mobile telematics applications. User-friendly features like gamification and ancillary services like roadside assistance are a few examples to cite.

big data

The subscription implies the collection of information with precision and accuracy. Big data is shaking up the property and casualty insurance industry. Big data technologies help make underwriting effective with crime statistics and risk assessment, leading to greater accuracy in the underwriting process that benefits all stakeholders.

Personalized customer experience

P&C is a cost-sensitive and competitive industry that requires engaging the customer to connect through personalized communications, thorough evaluations, and prompt claims. Personalized customer experience results in customer retention. Therefore, robust mobility solutions are required for insurance companies to initiate policy issuance, claims processing without physically going to the insurer.

Love it or loathe it, insurance companies can’t avoid cloud computing to align with customers who prefer to access their business through their mobile devices. Therefore, insurance mobility is the key for general insurers. Key brokerage, claims, underwriting, reinsurance, and accounting must be enabled with solutions to speed customer claims and assessments on a consistent basis, at reduced cost. The bottom line here is to reduce claims processing time. This will help improve customer engagement through multi-channel delivery for customers. Additionally, this makes it easy to schedule appointments, report losses, and receive notifications when needed.