Disruptive technologies, increased competition, and economic pressures are pushing P&C to go beyond traditional strategies.
A change is taking place in the general insurance industry. In this shift, some will emerge as leaders, many will be left behind, and another group may be removed from the market. The year 2016 continues with the disruption of the market. What are the forces disrupting the market? How it affects processes and stakeholders is already a heated discussion. Now let’s dig deeper.
First and foremost is disruption due to innovations and new product development. Innovations are both leveling and destructive. Just look at the potential for IoT to change the insurance business. IoT is adding new tasks for insurers. Portable devices, automobiles, transmitters, medical equipment, security systems, doors, lights, etc., provide insurers to segment markets and create new pricing models for the general insurance market.
The emergence of the sharing economy where assets are shared is creating opportunities for property and casualty markets. This means that insurance companies must create new pricing models to take advantage of those assets.
Are agents being replaced?
Digital technologies are throwing a wrench into established P&C markets. Before the threats of digitization, insurers employ agents to educate customers. But the growing phenomenon of digitization is slowly eliminating the key role that agents play as intermediaries 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 can influence the premium, as commissions paid to agents can be awarded as a discount to the customer.
Cyber security
Thanks to digitization, P&C customers expect personalized services such as anytime, anywhere access. This makes customers where Millennials are the target happy and at the same time opens up risks like cybersecurity and hacking. Such risks can affect the credibility of insurance companies. Today’s IT solutions include additional layers of protection built in to protect data assets.
Telematics
The growing automobile connected to mobile telematics applications is redefining traditional pricing models. The traditional model is being replaced by usage-based insurance (RBU). This will allow drivers to get discounts on their driving behavior. The lower the risk, the lower the premium. This trend opens up opportunities for mobile application providers to introduce premium features in the mobile telematics application. Easy-to-use features like gamification and ancillary services like roadside assistance are some examples to cite.
Big data
Subscription involves 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, benefiting all stakeholders.
Personalized customer experience
P&C is a competitive and cost-sensitive industry. It requires the customer to get involved to connect through personalized communications, meticulous evaluations, and quick complaints. Personalized customer experience results in customer retention. Therefore, robust mobility solutions are required for insurance companies to start issuing policies, processing claims without physically going to the insurer.
Love it or hate it, insurance companies cannot avoid cloud computing to align with customers who prefer to have access to their mobile devices from their companies. Therefore, insurance mobility is the key for general insurers. Key brokerage, claims, underwriting, reinsurance, and accounting must be enabled with solutions to accelerate customer assessments and claims consistently, at reduced cost. The bottom line here is to reduce your claim processing time. This will help improve customer engagement through multichannel delivery for customers. Plus, this makes it easy to set up appointments, report losses, and receive notifications when needed.
