The regulatory trend for insurance will likely take a tech trend in 2016 as against 2015. The insurance industry can expect to face new rules and modified demands that could majorly affect how companies operate.
Here are the top five insurance trends to keep in view:
1. Customer Centricity And Advanced Analytics
In 2016, consumers will increasingly dictate the terms of engagement with their insurance companies, a fundamental change in the industry.
This will allow insurers know their customers much more personally than before. As part of this trend, raw data will be transformed into actionable analytics.
The reward for doing so is significant. Increasing customer knowledge is an essential part of providing an effective omnichannel experience that allows insurers to recognize opportunities for cross-selling products and services that they have not had the ability to recognize in the past.
2. Portal Development And Digitization
The macro trend of external technological advancements imposing themselves on the sector is continuous digitization and the pressure it puts on organizations to improve their digital capabilities, particularly with portals and mobile applications.
This signifies a significant shift from the industry’s emphasis on using websites over the past years, which to millennials are just too inconvenient to use. That’s a huge change for the industry and the insurers who dedicate the time and resources to it in 2016 may find themselves customers’ favorites tomorrow.
3. Cloud and Software Service
As part of the same pivot toward customer centricity and digitization, insurers are accelerating the use of cloud-based solutions, which includes software as service and infrastructure as service offerings.
Insurers now streamline their infrastructure, architecture, and application portfolios, as a way to focus more IT resources on the kinds of initiatives that assuredly affect customers and agents directly. For example, more intuitive user interfaces and real-time access to policy and claims information and updates are now trending in the industry.
Leveraging cloud services for IT activities that don’t directly add value to the ultimate customer experience will remain an area of focus for insurers in 2016.
4. Usage-based Insurance and Telematics
Telematics and usage-based insurance are among the latest trends in Automobile insurance. The promise of improved pricing accuracy by using actual driving behaviors as the basis for rates has auto insurers competing to get there first.
There’ll be wider adoption in 2016 as carriers see the value proposition integrated into usage-based insurance, and customers overcome trust issues.
There are additional considerations for insurers around procuring devices for clients, collecting the data from the devices and the best uses for the obtained data. However, those are all questions of how to implement. The major questions for insurers in 2016 around telematics will be how much and when?
5. Core Innovation and Modernization
The insurance industry is not out of the woods yet for future innovative practices and processes.
Insurers who have not begun their journey to innovation will find themselves at an increasingly competitive disadvantage in 2016 and beyond. For insurers who have made significant progress on their journey to innovation, the future is wide open.
In total, 2016 will be a more transformative year for the industry than the past few years have been if insurers remain focused on their most important elements — agents and policyholders — and on the external technological and social forces impacting the industry, for better or worse.