2023 trends: insurance

Partners Ben Gower and Dan Garsin share their thoughts on what the next year will bring for the insurance industry and which ‘no regrets’ moves to make to ensure you aren’t left behind.

Fighting Fit:

Following a relatively brutal year in terms of claims for many insurers, if you aren’t putting measures in place to tighten your belt, you should be. You don’t even need to take a hit on customer experience or the experience of your teams. This year we’ve already helped insurers bank savings that are four to eight times the investment made to find and realise the savings. From rationalising facilities to squeezing the tail-end supplier spend, there are lots of opportunities to optimise your cost base.  

From Hype to Results:

Hype around AI/ML has led to a proliferation of automation activities across companies, resulting in little to no gains. It’s time to focus efforts and make sure you’ve got a scalable approach, so you actually see results from automation and AI/ML initiatives. This means no more flirting with AI and ML use cases, but a robust focus on returns. The opportunities are vast – claims eligibility and adjudication in the health insurance space is estimated to be worth $5.2bn annually alone.

Prevention and Recovery:

While debates continue over the role of telematics in P&C, there’s no doubt wearables have had a huge impact in the health space. Real-time health data has helped health insurers see a 68% drop in life insurance claims and a 20% increase in physical activity among policyholders. But preventative measures aren’t just a trend in health insurance. 

P&C customers and brokers increasingly want to see preventative measures included in the service from their insurers. And as well as prevention, insurers need to help businesses get back on their feet following an adverse event. Business in the Community have calculated that 40% of SMEs that experience a catastrophic flood event don’t open again. Claims processes focused on recovery are on the rise which is good news for policyholders and society alike.

Getting Embedded:

Whether it’s buying a holiday, a car or a house, increasingly insurance is available there and then, not as a separate journey and interaction. This embedding of insurance within other journeys is expected to grow 31.9% annually for much of the next decade, representing 25% of global premiums by 2030. If you aren’t working out how you’re approaching the opportunities and challenges embedded insurance poses, you’re going to fall behind. 

Hand in hand with embedded insurance, comes ecosystems, which are estimated to be the basis for 30% of global insurance revenues by 2025. A good example is the partnership between Discovery and Vitality. Discovery’s customers access Vitality’s health insurance products through their business insurance, providing tools to incentivise and reward healthy habits of employees, creating a healthier and more productive workforce. Such mutually beneficial relationships are what are powering ecosystem growth in the insurance industry.

So… start 2023 without regrets by making sure you’ve got your bases covered for the year. Trim unnecessary costs, drive results from AI/ML, be known for helping customers protect themselves and recover, and make sure you’ve got a plan for embedding yourself in the experiences of your customers and wider insurance ecosystem.

Get in touch today to get started.