New technologies will introduce major opportunities to the insurtech market in 2023, but may also bring some challenges. Companies will continue to improve and replace their legacy technology systems. That means industry stalwarts face competition from insurtech companies that offer instant app-based payouts and niche coverage types.
Some of the trends we’re seeing solve long-running insurance industry challenges. Others offer new ways of thinking about the customer relationship altogether. Here are some insurance industry trends to keep an eye on in 2023.
1. AI and Machine Learning
Artificial intelligence (AI) is an umbrella term that includes technology like machine learning and natural language processing (NLP). Insurance companies will increasingly use applied AI to automate the underwriting and claims process. This includes “human-in-the-loop” systems that use a combination of AI and human operators to perform tasks more efficiently than either could on its own.
For example, ProNavigator’s AI-powered search technology can recognize key insurance terms and acronyms. This allows agents and insurer call centers to quickly find the information they’re looking for across thousands of insurance documents held in various portals and file servers. Insurers can also use optical character recognition (OCR) to extract information from scanned documents and reduce the need for entering data by hand.
2. The Rise of Customer Self-Service
Customers want to solve their business problems quicker by doing more for themselves. The rise of digital insurance products, such as online portals and mobile apps, makes that possible. EasySend states that means that insurers can expect to see tools like online quote generators and chatbots become more prevalent. The more that customers can manage their own needs means the more time your staff can spend on more complex issues.
3. Drones and IoT Devices
According to a recent report by McKinsey, satellites, drones, and Internet of Things (IoT) devices will transform the insurance market by improving the accuracy of underwriting and claims. For example, a carrier could compile drone-generated images of an oil rig to inform the underwriting process in a fraction of the time it normally takes.
Due to this technology, the Instanda blog notes that future auto insurance premiums may start to change. They'll be based less on a policyholder’s driving history. Instead, auto insurance policies will likely focus more on the capabilities of a vehicle’s autonomous driving software and onboard sensors.
4. A Push Toward DEI Initiatives
With the Covid-19 pandemic ushering in the Great Resignation, many workers have changed what they want and need from their employer. Namely, employees are looking for a people-first workplace.
Because of that, 77% of insurance talent professionals reported that diversity would be a vital factor for the future of recruiting. However, many organizations are still trying to figure out how to implement DEI practices to engage candidates and boost employee wellness.
Align with leadership to outline DEI goals for your organization to strive towards in the coming year. Start internal DEI committees and consider bringing in a change management consultant. That way, you can make sure your organization provides employees with a sense of belonging. This will help you to attract and retain top-tier, diverse employees.
5. Shift Toward Environmental, Social & Governance (ESG) Initiatives
Closely tied to DEI is the push for a focus on ESG in the financial services sector. ESG initiatives are the set of standards for corporate behavior used by investors to execute sustainable investing. The younger generation of the workforce places great importance on working for and with socially and environmentally ethical companies. By incorporating these activities into your business company, you'll see a better business reputation. That can help your agency avoid a talent crisis from the impending retirement wave.
Implementing ESG factors not only improve the insurance customer experience, but can improve your business as well. Studies have shown that there is a positive correlation between ESG activities and financial performance. That means that your company will have the opportunity to outperform the market and see positive risk-adjusted returns.
6. Low-Code Software
Let's face it — the push for insurtech and strong digital transformation strategies are not going anywhere. However, adopting new technology doesn't need to be complicated.
Enter low-code software.
This technology is designed with ease in mind. Common features include simple drag-and-drop editor and data integration. Low-code software requires little-to-no coding.
Because of that, your team might not even need an IT professional to set it up for you. Users can quickly get up to speed and immediately reap the benefits of this user-friendly software.
40% of insurers are looking for solutions that can bring down costs of underwriting and claims management. Low-code software can do that by automating the manual tasks involved with these processes. You can even migrate data from your legacy solutions to low-software software tools, bringing down those operating costs significantly.
How Insurers Can Prepare for 2023
These insurance industry trends share a common thread — technology. The industry needs to to reshift its business models to focus around the benefits of digital transformation to move forward.
While it makes for a smoother customer experience, embracing digital technology brings about some challenges for your workforce. While customer-facing software puts a focus on the user experience, the same cannot always be said for employee software.
Remember that happy customers begin with happy employees. So the best way forward is for insurance companies to seek out software tools designed to make employees' jobs easier. ProNavigator's insurance knowledge management platform can help by simplifying information discovery and access, saving your agency valuable time.
The future of insurance is here. Contact us today to learn how we can guide your team along a seamless digital transformation journey.
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