When more than 100 executives in the insurance industry were asked what they consider to be the most dangerous insurance risks, we discovered that each of them mentioned these three things; pricing / profit, cybercrime and disruptive technology.
Futuristic companies use insurance to reduce the effects of cybercrime in their business.
In this article, we will discuss how these challenges pose dangerous risks in insurance. industry, especially in developing countries.
Cybersecurity and Cybercrime
On July 15, 2020, history was made when there was a major cyberattack on Twitter accounts for all the high profile individuals and organizations you know with a large following. [1
The insurance industry is not 100% secure. Cyber security and cybercrime are dangerous risks that insurance companies face in 2020 and are likely to face in the future. Insurance companies have more to worry about cybercrime than anything you can think of.
Apart from the direct cyberattack insurance companies, they also have to pay policyholders for the losses they have. companies a lot because they know they have a large amount of personal information about their target audience, the victims. It does not matter if you are a customer of the insurance company or if you have only visited once to get an insurance statement.
If hackers succeed in gaining access to the insurer's backend, they are likely to steal credit card information about customers and use it for malicious purposes. Social technology is a major challenge right now in the insurance sector.
General insurance coverage is what gives a policyholder the opportunity to access full benefits should they be a cybercrime attack leading to loss of funds or expensive equipment, including reputation.  Disruptive technology
Digital disruption in the insurance industry is something that has been expected long before it finally came. Although not really adopted in some developing countries.
In developed countries, for example, it is super easy for anyone to get their car or life insurance information online without a phone call, just by using the insurance information counter on the insurer's website.
Unfortunately, in developing countries you have to visit an insurance broker or the agent of an insurance company to get a quote. Sometimes they charge a consultation fee.
The emergence of start-up start-ups, the widespread artificial intelligence and the inconceivable growth of digital transformation of business models are some of the most prominent disruptions going on in the insurance industry.
In order for an insurance company not to become obsolete, lose its customers to its competitors and possibly fight, they must decide which of these innovations they will need to adopt based on who their audience is, what they want their unique sales proposal is and how competent they are dealing with such growth.
It may sound simple but it is obviously one of the most difficult decisions that insurers are struggling with right now. They have absolutely no idea which of the insurance industry's digital innovations to adopt and which to ignore.
Of course, the adoption of artificial intelligence in the insurance industry comes with its own risk that insurance companies will have to start thinking of proactive ways of dealing with it.
Pricing and profit margin
Inflation, exchange rates, government and industrial regulations and policies and interest rates are some of the few factors that affect insurance prices and profit margins.
There is a way you will price your insurance and no one will get their coverage from you and there is a way to customize it and you will not be profitable.
It is a great challenge for insurance companies to decide these things in an ever-evolving society like ours.
To ensure that insurers do not rip you off as policyholders, they will use your credit score and history to determine your insurance premium. If for any reason you do not qualify, you will be notified.
Daily rules continue to put pressure on profitability and this is a dangerous risk in the insurance sector. A typical example is Solvency II, which requires insurance companies to maintain higher capital levels without reducing the total return. And for them to achieve this, they must either reduce costs or increase pricing.
Cyber security, pricing and disruptive technology are the three biggest, most pressing and dangerous risks for the insurance industry. It does not matter if you operate from the United States, the United Kingdom, Australia or Canada, the challenges of these insurance industries are the same.