Gone are the days when insurance companies simply sold coverage and paid claims. Today, they're doubling as tech firms, striving to stay ahead in a fiercely competitive industry drastically altered by digital transformation.
The rapid progression of artificial intelligence (AI) and telematics insurance is a case in point. With AI, insurers are harnessing large datasets to tailor policies, reduce fraud, and streamline claims processing. Meanwhile, telematics creates more precise insurance pricing by monitoring real-time vehicle usage data.
Among the key trends emerging in the industry, we're witnessing increased usage of insurance technology—or 'insurtech.' Start-ups and established insurers, armed with digital tools, are crafting easier, faster, and more efficient experiences for their policyholders. By leveraging advances in AI, source data capture, and machine learning, insurtech players are upending traditional insurance models.
Another development shaping the insurance scene is driver behavior profiling through telematics insurance. By gathering data like speed, breaking patterns, and even time-of-day driving, providers can more accurately pinpoint risky drivers and adjust their premiums.
But it's not all about technology. The industry is also seeing a paradigm shift in customer expectations, especially when it comes to environmental, social, and governance (ESG) aspects. With millennials and Gen Z becoming the principal insurance buyers, insurers are feeling the pressure to evolve beyond pure profit motives. Moving forward, we expect carriers to bake sustainability into their business models and let ESG considerations guide their investments.
Finally, the pandemic has catalyzed new working models in the insurance sector. Remote working, service delivery, and digitization have transcended being mere crisis responses to becoming the new 'business as usual.' As they grapple with these changes, insurers need to ensure they maintain sophisticated, high-level cybersecurity to protect customer data.
These are just a few of the trends we see shaping the insurance industry in the 2020s. With technology, socio-demographic shifts, and global events at play, the only constant insurers can bank on is change.
Emerging trends in insurance: From AI to telematics
