It’s without a question that 2020 has been a year to remember. The emergence of COVID-19 and the impact that it has had on families and businesses has been significant to say the least. Millions of jobs were lost and some major companies went bankrupt in order to salvage the damage that has already been done. While the economy is set to bounce back to some resemblance of normalcy relatively soon due to the COVID-19 vaccine being distributed in record time, what does this mean for the insurance industry and its predicted trends for the coming year of 2021?
High Demand/Limited Supply
Insurance companies are wise to prepare for a hard market in 2021, meaning that the demand for insurance will be high but the amount of insurance available will be in limited supply. This is caused from, of course, the hit that the economy has took from the current pandemic. As a result of these hard market conditions, higher rates may be the new normal until the market is back to normal. Nevertheless, insurance companies will double down on offering value and peace of mind in order to ensure that customers wont stray away as premiums rise.
Customized Plans and Reasonable Premiums
Thanks to data driven insurance, companies can tailor offers to customers by utilizing more metrics in the underwriting process as well as offer more fair insurance premiums. Insurers must market to technological literate millennials, customers in their 20s and 30s, in order to be relevant in the economy and stay on top of the insurance game.
One of the beautiful aspects of technology is the ability for automation that makes life easier. This trend is no different in the insurance industry, as artificial intelligence can be used to automate different tasks such as risk assessment, fraud identification, and underwriting. Combined with big data, AI software can translate information coming in and incorporate it into more efficient insurance plans.
Even though augmented reality is still in its infancy, it is promising to the insurance industry and will make a big impact on how insurers interact with customers. Imagine making an insurance claim as a result of a car accident, and then waiting hours at a set designated location for the claims adjuster to arrive. This scenario will become obsolete when you can get immediate feedback via this game changing technology at the comfort of your own home. This is especially appealing to customers who will continue to work from home, or customers that lead a busy lifestyle.