The pandemic outbreak has elevated the significant changes in society and impacted almost every industry across the globe. As a result, the COVID-19 crisis has instantly shifted consumer needs and expectations, leaving challenges and new opportunities for businesses, starting to embrace and adapting to the “new normal.” The insurance sector was also not left behind, having a positive push towards digital transformation and developing customised solutions for the challenges facing the modern consumer.
Without a doubt, the COVID-19 proved that the expression “overnight everything can change” can be applied in real life, coronavirus pandemic having the direct impact also on Year 2020 insurance trends. Let’s take a look back at the last year’s insurance trends covered.
Tailored products and customer experience
The 2020 and economic fallout has changed the whole world, shifting purchaser needs, expectations, and user behavior. According to the IMB data, the pandemic outbreak has accelerated the shift toward e-commerce by five years. Taking a look into the e-commerce data of Amazon, amid the pandemic, the retail giant has marked a forty percent year-over-year growth.
Considering the technological impact, increased numbers of internet consumption, and purchases made online during the pandemic, the insurers started recognizing and praising the importance of tailored offerings, providing usage-based and digitalized insurance products. The insurance product personalization brings benefits for both customers and insurers.
Apart from increased user satisfaction, peace of mind, the personalized products unlock new opportunities to enjoy retention, accurate risk assessment, and stable margins for the businesses. Therefore, apart from the insurance sector’s challenges, the global pandemic has provided opportunities to demonstrate the ability to adapt to the fast-paced changes, innovating new, personalized products supporting modern consumers in the era of digitalization.
Increase of digitalisation and partnerships
In the latest research conducted, more than sixty percent of the consumers prefer to monitor claims status online. That emphasizes the importance for the insurance providers to provide all necessary infrastructure for the users, having digitized processes in place. How to achieve it? The insurers have started to embrace the partnership importance to enable new and customized products, partnering up with the Insurtechs, adopting APIs.
As mentioned in our previous articles, the established partnerships between InsurTechs and incumbents are a win-win situation for both parties in tackling the business challenges together, especially in the time of uncertainty where time is money. With digitized solutions, the insurers can develop new revenue streams, ascertaining the 21st-century buyer requests and opening the digital path to their company. Also, thanks to the customization capabilities, the probability of increasing the policy sales increases for the insurers.
With the increase of working-from-home, usage of the world wide web, and online shopping, the pandemic has brought broader opportunities for criminal activities in the online environment, increasing the rates of cyber crimes. According to the statistical data, around 4 000 cyber-attacks are occurring per day during the pandemic, leading the experts to name last year as a cyber pandemic.
In 2020, cybercriminals started to adapt their strategies and target the victims working from home-office, becoming a gateway to new forms of data theft for individuals and corporates, leaving them vulnerable to cybercrime. As the business environment is and will stay increasingly digital, the growing cybercrime is outpacing the corporate environment’s ability to control it handily, thus increasing demand for proper cyber insurance cover for businesses.
Mobility embraces simplicity
With the pandemic outbreak, and as in the middle of the year, the virus shook up transportation in the cities; there has been a rapid evolution in micro-mobility, consumers using e-scooters and e-bikes across the globe. With a growing volume of micro-mobility users, similarly as in the automotive sector, it developed potential risks in terms of accidents, keeping the governors busy and under pressure working on legal regulations covering public safety and liability issue solutions. But from another side, it has created new possibilities for insurance providers to provide coverage for a swiftly growing vehicular segment.
Apart from mentioned above, the COVID-19 crisis has significantly impacted the auto insurance sector. Due to the decreased usage of cars, shifting consumer expectations, and the need to save money, it has forced the insurers to provide a more supportive and flexible environment for customers. The mix of discounts, flexible payment plans, and rebates are only a few examples and strategies used to retain consumers and soften the pandemic’s financial burden.
In the last three years, there has been a rising trend of insurance using Artificial Intelligence. According to the report data, nearly 40 million Americans currently use voice-activated assistants, with the expected spend reaching 77.6 billion dollars in 2022. No doubt, the users are looking for more convenient solutions in the insurance products, placing Artificial Intelligence as the unprecedented opportunity for insurers, with personalized products, making a step closer to the customers.
To keep it short and simple, AI can help leverage amounts of consumer data to produce offerings based on consumers’ needs, pain points, and behavior. Also, AI can improve the underwriting and claims management process, enabling both customers and insurers to access data faster, coherently, and straight-forwarder. Although AI is still in its growth phase, it will become more present in the insurance industry shortly, when data collection becomes vital in production. Autonomous vehicles are only one of the examples that will be spotted amongst data-generating technologies claiming coverage.