For many, 2021 may not come soon enough. Whether COVID-19 hit close to home or not, it disrupted our entire home and work life. For insurers, this led to disruptions that no one had expected. Global premiums had passed a full-time high of $ 5 trillion and the World Bank's estimated GDP in the United States would increase by 1.6 percent. Despite a long stretch of low growth and declining earnings, insurers were positioned for a good increase in top-line revenues.
COVID-19 changed all that. The urgency to satisfy a virtual workforce and almost overnight changes in macroeconomic conditions made them struggle to get their business results. And on the human side, they faced concerns for their own communities, including the health of their friends and families, socio-economic injustices and violence, and an uncertain future for small businesses.
These seismic changes in life and work are also reflected in what we heard from insurance consumers in 2020. In my latest report, Three Ways COVID-1
With all the unrivaled events of 2020, insurance companies now want to build back better and with greater resilience. Based on what we have seen, I give the following predictions for what we can expect to see in 2021.
- Expect new risk models, displacement capacity and new products and pricing. In 2020, we saw historically reliable risk models upwards. With various fires seen in previous years and a record-breaking hurricane season, catastrophic events linked to climate change began to feel more like claims as usual. Meanwhile, ransomware and wiperware attacks continued, and business interruption losses linked to COVID-19 and civil unrest further drove the underlying change in risk-adjusted capital costs.
In 2021, insurers will pull all the levers to maintain financial resilience and the capital reserves needed to guarantee this new risk landscape. They have to choose between investments in product lines based on which ones provide the greatest competitive advantage. As a result, we will see significant changes in available capacity and pricing.
- Cyber is everywhere and becomes more personal. Even when we look for large-scale distribution of a COVID-19 vaccine, work from home and digital will continue. New risks created by the increased cyber attack area will continue to drive the demand for cyber protection in commercial lines. With work activities that risk consumers' personal data and digital assets such as photos and media greater risk, insurers will also have the opportunity to expand beyond simple "identity theft" for consumers. In 2021, look for more holistic prevention, mitigation and recovery offers in cyber for personal lines.
- The digital distribution game is on. In our report Where is the repayment of digital innovation in insurance Jean-Francois Gasc and I how leading insurance companies invest in customer-oriented digital innovations, especially in distribution.  Distribution is already a battlefield for insurance companies and that battle will intensify in 2021. Insurtechs with a focus on distribution sees large investments from venture capitalists. As they continue to compete against start-up distribution games, Dominant will take the experience of 2020 to deliver enhanced digital sales and service experiences.
- The industry will become real about inclusion and diversity. The heartbreaking and high-profile deaths of Ahmaud Arbery, Breonna Taylor and George Floyd triggered both social unrest and a delayed conversation about inclusion and diversity. In 2021, the insurance industry must show progress. Insurance companies are very aware of the need to be on the side of their customers when things go wrong. Through this focus on experience, they understand the need to reflect on their customers' lives. However, there are some areas where the industry needs to show a stronger commitment. See more in my colleague Darcy Dague's blog post, Talk vs. Action: the limited state of diversity in insurance .
- Insurers will reach ecosystem solutions in wellness. Insurers will invent their offerings for more demographically targeted health solutions aimed primarily at Millennials and the age group. We will see increased convergence around well-being in P&C, health insurance and financial planning / welfare management industry made possible by IoT and cloud-based health units and programs.
During the trying year we have just experienced, I take comfort in knowing that our industry is unique in its position to help when things seem to be at their worst. I hope everyone comes back in the new year hired and ready to face the challenges that lie ahead.
Happy New Year to all!
Disclaimer: This document is for general information purposes only and does not take into account the reader's specific circumstances and may not reflect recent developments. Accenture disclaims, to the extent permitted by applicable law, all responsibility for the accuracy and completeness of the information in this presentation and for any acts or omissions made based on such information. Accenture does not provide legal, regulatory, auditing or tax advice. Readers are responsible for obtaining such advice from their own legal counsel or other licensed personnel.