قالب وردپرس درنا توس
Home / Insurance / 5 reflections on the insurance industry 2021

5 reflections on the insurance industry 2021



When we end 2021, it seems appropriate to review the predictions we made for the insurance industry this year. I presented my hypotheses in December last year in my post, 5 forecasts for the insurance industry 2021. Let’s see how these predictions came true.

1. New risk models, changing capacity, new products & pricing

2021 was a year of economic recovery, but uncertainty remains. In addition to the highs and lows of COVID-1

9 infection, persistent supply chain disruptions and inflation, insurance companies are facing new loss patterns in property (as catastrophic losses linked to climate change appear to be). These conditions together challenge insurance companies when deciding which industries are likely to offer long-term competitive advantages.

While insurance companies pulled all the levers for financial resilience in 2021, pricing is the lever that got the most attention. We saw this especially in commercial non-life insurance lines where insurance companies raised prices in response to both increasing cyber and climate risk. In the personal area, homeowners’ insurance prices also rose in response to catastrophic losses.

As predicted, we saw changes in risk models, such as new industrial risk models for cyber and FEMA’s new pricing methodology for National program for flood insurance. We also saw more and more targeted use-based insurance models, including a product for pilots of light aircraft who want coverage per week or day. These changes are indicative of the industry’s dynamics that are pushing capacity and return on equity.

2. Cyber is everywhere

In 2021, we also saw expanded cyber offerings within personal lines and group benefits and voluntary benefits. These products include coverage for new threats such as ransomware and may be more accessible and tailored to the individual risk profiles.

Hos Accenture State of Cybersecurity Resilience 2021 report says executives from companies in 23 industries with revenues of $ 1 billion or more that cyberattacks against their organizations have increased by 31% since 2020. Respondents also estimate the associated costs over the past 12 months in their organizations at $ 1.3 million. The vast majority (95%) of respondents say that their organizations use cyber insurance, and most say that they have submitted claims for ransomware (57%), business interruptions (56%), malicious internal measures (56%), phishing ( 48%), or denial of service (31%).

The key figures for cyber insurance among small and medium-sized companies are lagging behind the larger companies. The carriers are withdrawing capacity and focusing on more established and profitable segments and leaving cyber insurance for small businesses open to new entrants to the market.

The digital distribution game is more complex

Although the pandemic forced a rapid transition to digital channels, there was no competition for the best distribution channel directly to the customer. Human connection is more important than ever when customer trust decreases. We saw in the spring Insurance consumer study 2021 that the right Human + Machine mix restores consumer confidence and engages them better.

Although approaches will vary, the Human + Machine combinations will continue to be crucial for both established and insurtechs. For example, Germany-based Wefox relies on agents and brokers in distribution and finds efficiency in automating almost 80% of administrative processes.

4. The industry is starting to become real when it comes to inclusion and diversity

Evidence of disproportionate effects of the pandemic on women in insurance and the growing influence of social movements that Black Lives Matter has left an indelible mark on the industry. Almost one in three (32%) women working in insurance left their jobs temporarily or permanently during the pandemic, and 30% of those who stayed in their jobs are considering quitting. The insurance companies respond with initiatives to address the gender gap in the insurance workforce and with clear goals for increase the diversity of the workforce. But these goals seem higher than competition for talent (diversity or not) intensified in many markets.

5. Insurance companies strive for ecosystem solutions in wellness

The pandemic triggered demand for telemedicine visits and other digital health services that many consumers have now come to expect. We see innovations in connected and IoT devices that create new revenue streams with many new opportunities in fitness and wellness.

Health and well-being brands iFit and Headspace were among the 50 Top marks for Millennials 2021, but it was the Peloton who took No. 1. Their home training equipment and classes are a Millennial favorite. And Peloton uses its brand value to increase subscriptions through partnerships in corporate health plans.

Although the technical learning curve for Millennial and Gen Z consumers is short, insurance companies and their related industry partners cannot afford to overlook the opportunities and needs of less digitally savvy segments. World Economic Forum advocates measures for new risks from disinformation, cybercrime, security and privacy issues to help increase digital integration across generations.

Looking forward to 2022

When we go into the holidays, it’s time to think about what awaits the new year. I look forward to sharing these predictions and hearing yours.


Get the latest blogs delivered straight to your inbox.


Source link