Three P&C Industry Predictions For 2019
For many, 2018 will remembered as a whirlwind on a number of fronts.
Transition is constant, but no matter how we may look at the year ahead, changes in the property & casualty insurance space will be profound.
Put even more simply, 2019 will be big.
Here are three of many key things we foresee happening.
No. 1: Customers will buy insurance from BigTechs.
With emerging technologies, competition and pressure for improved customer experiences build up daily. With the industry ripe for digital transformation, it is no surprise customers are not satisfied with existing offerings. The ease of accessibility and variety of convenient experiences set by other industries have seen to that.
For a long time, insurance companies have used outdated systems that were not built with agility and flexibility. Today, that is where artificial intelligence (AI), machine learning (ML) and other innovative technologies come in. BigTech firms and InsurTechs are rapidly entering the market armed with these tools and expertise, and the ability to scale customer-centric approaches that cater to personalized needs and services.
In fact, a recent Capgemini report found nearly a third of customers would consider buying at least one insurance product from a BigTech firm. Customers are expecting rapid convenience and innovation from insurance firms — just think of robots processing claims and payments in near real-time, no human representative required.
That operational efficiency and personalization has already cropped up. Think always-on, responsive chatbots communicating with customers. Connected devices and sensors that automatically detect accidents and begin to set up a claim around the damage. Such new ways of automating customer interaction will provide faster service for customer satisfaction, while opening up company throughputs and reducing operational costs.
No. 2: Mountains of IoT data will need to be owned and secured.
2019 will see significant adoption of Internet of Things (IoT) product enablement — smart homes, connected vehicles, and the personal wearables all linking together. Perhaps the first question to arise from that is, “who owns the data?” Expect large discussions around transparency and sharing to come to light often in the new year.
There are then the myriad privacy concerns to match, as well as the potential lock between customer and insurance company. Security has always been important, but the speed and quantity of breaches happening across any number of industries that should keep insurers up at night. One mistake or breach, and customer faith will erode away as they instead turn to a BigTech they already use (and trust).
One avenue? It is possible that as the amount of data explodes exponentially, companies may be able to help ease the burden for insurers by focusing solely on storing and securing the data. Then when it’s needed for large scale reference and implementation, it’s there. But the focus for insurers can be on best matching the data to more applicable, innovative products.
No. 3: Partners and customers will need to be the core.
At the core for any successful insurer in the year ahead will need to be a fully digital ecosystem that seamlessly interconnects them insurers, customers and partners. Because we live in a mobile, multi-screen, multi-platform world, customers expect to be able to interact with companies however and wherever they are. The platform variety is astounding, but not surprising — think chatbots, Facebook, text/SMS, social messaging, and even more individually via connected devices that capture and apply real-time data for value-added, personalized services.
Together with partners, reach and opportunity will expand exponentially and integration will become more seamless. Working with hardware OEMs opens up access to the pure, real-time data. Aggregators and intermediaries will help align distribution. And with third-party vendors that can help more quickly shift and scale, all to help bring more palatable claims management and payout efficiencies within reach.
Now is the time to step back, assess, and predict. No matter the lens used, there is clarity that 2019 will deliver in big ways for property casualty players.