Strategies to Stay Ahead of P&C Insurtech Trends in 2022

The pandemic sent almost everything online that wasn’t already. Younger people, born into the convenience of the internet, already wanted more digital options. People who have been more reluctant adopters found a sudden need to start the learning curve.

Industries adapted, including ours. Agents saw their in-person sales numbers drop as everything went to phone and digital.

So how to keep ahead of it?

Some insurers (and reinsurers) are investing heavily in insurtech startups for cutting-edge software. Others are taking advantage of specialist companies to help migrate their data to cloud storage or create custom ways to interact with new and returning customers while keeping sensitive information private.

Wherever you are in your P&C company’s digital journey, taking the next step this quarter or next will keep you from falling behind.

Data speed is arguably more important for insurance companies than just about any other industry. Whether it’s creating great customer service by paying out claims promptly or near-instant online approval for new policies, the faster a company can gather all of the appropriate risk assessments, the better its competitive advantage.

Rather than waiting for a person to send a file, building a cloud ecosystem for data means information can be shared faster.

It also allows computers to flag claims for potential fraud, which a human can then review. Connected telematics can send data verifying claims. One example is whiplash from car accidents. Is the injury medically feasible if the cars were traveling at one mph – information that the vehicle’s computer may have registered?

Another example is pulling public social media feeds when assessing potential fraud cases. Crippling back pain one day followed by surfing can initiate red flags, which a claims adjuster can then review.

Sales and marketing teams can use data to help pinpoint prospects and qualify leads. The more information they can get for an ideal customer profile from stats on your current customers, the more effectively they can run new campaigns and close sales.

At this point, it’s not a question of if but when to migrate to the cloud. The sooner your company gets this done, the faster you can move on to more innovative insurtech that will keep you ahead of the competition.

It’s a common example to look at individual data from cars or health trackers. Consumers are getting more and more comfortable with sharing their data for potential discounts. Usage-based pricing gained popularity during the pandemic as people drove less than usual.

But some companies are trying to take that even further with personalized recommendations. As one example, satellite imagery of landscaping around the house can trigger recommendation letters if a tree overhangs the roof that could fall in a windstorm.

Beyond preventative measures, predictive monitoring systems could remind your customers to close their vents before an evacuation event or send a notification when a piece of equipment isn’t functioning correctly.

Implementing this one will take a little more work. First, educating consumers on how much they could save is a task for the marketing team. Working with car companies as an example of making monitoring systems a standard inclusion with new cars is another strategy some companies are attempting.

Drones and other robotics are in the early adoption stages for risk and claims assessment. Instead of putting a person on the roof of a building, drones can scan the roof, looking for areas of concern.

Smaller drones or robots can perform 3D scans in hard-to-reach areas that are either too dangerous or too small for a human. These scans can be rendered in a 3D environment for the claims or underwriting team.

The biggest advantage of drones is that they’re faster than sending a team of humans.

The next step for most P&C companies is assessing what areas of claims and underwriting are the most time-consuming for humans to inspect and run feasibility numbers to look into development.

The good news is that building the software for these tools doesn’t necessarily have to be done in-house.

The bad news is cybercrime is getting more advanced, arguably becoming an increasingly sophisticated industry. The good news is that technology fighting it is also getting better.

This is leading to what the insurtech industry is calling trust architecture.

The goal is to increase the security of digitally handling sensitive customer information. Many companies are exploring options through blockchain technology. Others are trying to invent new ways to improve identity management verification.

Security can be as simple as initiating dual-factor authentication, but more information protection measures will need to come from back-end architecture as cybercrime increases in ingenuity. Exploring security options through blockchain technology is one of the more promising long-term security measures P&C insurance companies can explore.

Automation is one of the fastest ways to free up employee time. For example, underwriters can spend over a third of their day on administrative tasks. Handwritten applications, as one example, often require a person to interpret the handwriting, so your underwriter is just transcribing data.

Using algorithms to bypass an underwriter review can get the application approved almost instantly for simple applications.

Artificial intelligence can automate straightforward claims, getting them paid out fast, boosting customer retention.

Machine learning can process potential fraud in standard claims and send it for a human to review.

Integrating these technologies into standard practice can save time, labor, increase customer retention, and prevent fraud that might otherwise go undetected.

After you’ve completed the first step of cloud migration (because the AI will want fast access to tons of data), the best way to start is to pick one and build up your team or work with an insurtech company for development.

Here’s the big one.

The average age of an insurance agent in the US is between 45 and 59, depending on which source you use. On the higher end of that statistic, fewer young people are going into the profession, and there are another 10ish years before the age group retires.

While many younger consumers prefer to get policies digitally without ever speaking to an agent, there will still be the need for someone to answer all of the “what if” questions that live agents field.

Either way, P&C companies will need to invest in improved chatbot software to answer the most common FAQs and staff to be available over various methods – phone, chat, email, and social media.

The second component hits doubly hard as the industry moves toward more advanced technology. Hiring great programmers has always been difficult, but now there is intense competition for talent, even between sectors. On top of that, insurance companies need the fastest possible access to incredible amounts of data and keep that data secure. Plus, compliance makes it tricky to adjust to the new digital insurance space with any type of speed.

A couple of solutions to look into are offering remote work or working with an insurance specialist software company. The former can attract talent without narrowing the pool to the local area or people willing to relocate. The latter means you can customize exactly what you need with specialists already familiar with the industry.

Many of these trends are sources of stress for many P&C companies, especially ones that didn’t pivot toward a digital ecosystem as fast as their competitors over the last two years.

But, the good news is that the technology is better now than what was available for the companies who did it early.

Knowing the trends is one thing. Acting on them is more complex, but also more valuable as your competitors keep notes on insurtech strategies they will get around to in some future quarter.