By Rajeev Batra, EVP & Head Insurance, Coforge
From new regulations and policy changes to the emergence of innovative technology, the insurance industry is constantly evolving to meet the needs of consumers. We will look at some of the top trends in insurance for the year 2023. We will explore how technology is changing the face of insurance and discuss how insurers are adapting to meet their customers’ demands and what that means for their bottom line. Read on to find out more!
Simplification of IT systems
Insurance carriers is dealing with multiple legacy systems that are difficult to manage due to integration issues, outdated technology, higher downtime, and the availability of the right skillsets to manage these applications. It is always a challenge for insurance carriers to keep legacy systems current while incorporating disruptive technologies such as cloud, mobile, or analytics. Insurance carriers will continue to focus on modernizing their legacy systems by automating routine tasks and revitalizing the technology stack by making the IT footprint more agile, intuitive, and responsive. Focusing on bringing transformation initiatives, standardizing architecture models, and implementing automation to drive efficiencies. Partnering with insurtechs to bring innovation and use of advanced technologies will help insurance carriers respond faster to customer needs.
Reaching out to millennials and the younger generation
Millennials increasing use of digital channels will see a driving shift in the distribution model. They have a more defined sense of their financial goals and prefer to directly purchase through digital channels. Insurance carriers will continue to innovate their distribution mix to create more pull from this segment. This will help insurance carriers reduce their customer acquisition costs and offer personalized buying experiences.
Core systems modernization remains a priority
The insurance industry is seeing a massive technological overhaul and owes this rapid shift to changing business models, renewed product centricity, and evolving customer expectations. Latest market trends suggest that core platform transformation and modernization have surfaced as the top priority for insurance carriers. This revamp has risen to significantly improve the system value chain and offer better, unified experiences to enterprises and their customers.
Implementing innovative distribution management systems
Large and mid-sized insurance carriers are exploring ways to improve their sales and financial growth. Distribution management systems play a critical role as they streamline compliance activities, support flex and complex commission structure, effective management of distribution hierarchies, and self-service capabilities. Insurance carriers are looking for dedicated agent and broker experience platforms, which have cognitive machine vision-based solutions, and predictive analytics-based enablers in their vision-based roadmap, enabling them to achieve growth outcomes. An efficient and agile distribution management system helps insurance carriers to improve time to market and enhance the distribution experience.
Insurance carriers are looking to improve underwriting through understanding risk combined with AI/ML, predictive analytics, and advanced statistical models. Helps them in adding real value and supports disciplined underwriting. They are also looking for innovative underwriting solutions that will provide an interactive experience with enough configurability to allow carriers to deliver a powerful decision support tool for quicker and more informed judgments.
Enhancing Agent, broker, and customer experience (ABC)
Consumer expectations are changing due to digital experiences. Agents have been asked for faster quotes and decisions to compete for business. Insurance carriers are looking for digital experience platforms aligned with their digital strategy to support improved experience for the agents and policyholders. Insurance carriers are looking forward to AI-based outcomes to provide prediction and remediation, which takes much shorter time than the current ‘automated’ processes. This will help in new business and quoting capabilities integrating with core systems across the insurance value chain.
The insurance industry has shown incredible resilience over the last few years. The focus will continue to service customers better, improve efficiencies and respond faster to market needs. Technology remains a primary driver for the business to scale and grow.