Our world is forever changing as a result of the digital revolution. We live in a time when technological advances are causing the various economic sectors to evolve at breakneck speed. To the point where, in a few years, industries like insurance will transform some of the identity markers that have been in place for years.
There are numerous indications that the insurance industry is preparing for seismic change. Ecosystems will emerge in which suppliers from various industries collaborate to create value based on shared data. It will not be a case of selling isolated products and services, but of selling experiences created by a diverse set of actors.
According to a recent insurance survey, the majority of insurance industry leaders believe that current business models will be forced to be changed in the next 5 years, so much so that they could be beyond recognition, and that these ecosystems will be the primary agent of change with a dramatic impact to the industry.
Citizens’ consumption habits are changing dramatically today. The COVID-19 pandemic has only accelerated this trend. Today, younger generations are more interested in using things than owning them, while older generations, largely as a result of the 2020 lockdown, have overcome their fear of new technologies. According to recent data, the percentage of people aged 65-74 who reported having done some sort of online shopping increased by 7% from 2021.
This development is just one of several current societal trends. The insurance world of today has been tasked with keeping up with the ever changes in technology. Keeping client’s data safe and secure while dealing with the aging consumer, inflation and rising interest rates. As a result, the insurance industry exhibits its own trends related to its various business lines of coverage.
New generations will own fewer possessions and consume more shared goods and services. To address this scenario, the insurance industry must develop new business models and B2B relationships.
People will travel in various semi-autonomous and connected modes of transportation by 2030. In this case, insurance would most likely cover the entire trip rather than just a single vehicle. Furthermore, users will pay for the service on a per-use basis.
Data is everywhere.
Users will be surrounded by technology and smart devices, that collect data and understand how to transmit data or create that date into usable information. This will have a significant impact on how the insurance industry operates. In fact, it will secure real-time data events rather than specific products. It can also give companies additional data that they didn’t have before that will allow them to make more efficient underwriting decisions in the future. This should make for a more for a larger bottom line.
Changes in the climate
Climate disasters will become more common over time, affecting our way of life. In this scenario, insurance companies’ role will be to advise their customers on how to live sustainably and avoid risks. Areas plagued with fires or continued natural disasters may face an increase in rates.