Old rules need to be broken and new ones need to be made to guarantee customer satisfaction and retention in uncertain times. Insurers also should expect leading tech companies such as Google and Amazon to extend their influence into the sector.
A 2022 roadmap to P&C insurance
Few envisaged that 2021 would be a banner year for climate-related risk. The year brought to light the need for increased speed to market when launching new products, and agility when it came to customization.
With the annual severe weather insured losses for 2021 surpassing $20 billion in the U.S. alone, accidents caused by climate change are something that won't be overlooked going forward. S&P research found that 66% of major global companies have at least one asset that a natural disaster could highly impact.
Old rules will be changed and adapted to guarantee customer satisfaction and retention in uncertain times.
Personalized products will take center stage
Traditionally, insurers would "stay current" and "branch out" into new risk niches by editing small sections of one central contract base, keeping 80% of the content the same. Going forward, this approach will end up becoming a setback when expanding to different markets.
Individualized insurance products are set to become abundantly available, making competition within niche markets ruthless. The first to market will reap the most benefits.
SaaS-based solutions will give carriers access to a range of digital tools that feed into customizable insurance products that, in turn, appeal to a wide variety of customers.
Big tech is moving into the insurance space
Insurers should expect leading tech companies such as Google and Amazon to extend their influence into the sector. Carriers can use these giant companies and their technology to create niche insurance products that are totally customizable.
This will be no easy task. How many niche insurance products will need to be made and customized? From matching bracelet stores, to roofing experts, water delivery services, airplane manufacturers and more. There are thousands, if not millions, of different businesses and non-profit organizations that need insurance.
Ground-breaking data and innovative technology will be at the heart of profitability in 2022 and beyond. What carriers need to remember is that customers need them now more than ever. The world may be on its way to overcoming the COVID-19 pandemic, but new risks are always around the corner, and insurers must constantly be one step ahead.