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Six Trends Shaping Digital Insurance Tech Strategies in 2021

2020’s triple whammy of COVID-19, natural disasters, and social upheaval set the insurance industry on its ear and disrupted long-standing insurance equilibrium. In a new report, Ellen Carney, principal analyst at Forrester, identified six trends that will shape the insurance landscape and determine priorities for digital and tech teams at property/casualty insurers in 2021:

  1. Customer experience remains Job 1. P&C insurers are focusing on making the purchase, use, and renewal of motor, dwelling, travel, and retail lines simpler, faster, and more personal – and virtual. When Forrester asked U.S. insurance customers what attributes they value in a financial services provider, 56% said excellent customer service, 45% excellent online experiences, and 31% excellent mobile experiences. Insurers are focused on delivering easier-to-use digital tools and digital servicing education in the onboarding process. “It is time for digital strategy teams to face up to the secret shame of the industry: the failure to effectively onboard new customers by teaching them about — and how to use — digital servicing tools as part of the binding process.”
  2. Insurers are revolutionizing products and packaging. An upside of the pandemic is that insurers are delivering products that once died at the feet of actuarial, legal, and compliance professionals. Carriers like Allstate and State Farm bought insurers offering coverage for cash-strapped consumers, while startups like Thimble added more flexibility in their by-the-month small business coverage. COVID woke up insurers to the fact that what customers needed was going to be different — and immediate. “The demand for new operational performance metrics to reflect how the entire tech stack organization supports the customer will require ruthless rethinking of success — and big thinking on culture and change management. Prepare for intransigence.”
  3. A rough claims year increases focus on claim leakage. COVID-19-related P&C claim losses could top $100 billion, and 2020 global natural disasters amounted to $210 billion, an increase of $166 billion from 2019. These big losses will drive a bigger focus on claim leakage. That’s why in 2021, insurers are investing in smart analytics to score leakiness at first notice of loss that claim management systems expose, with the management consultants returning with an improved playbook.
  4. Social unrest puts pressure on insurance underwriting. Some predict the riots, disturbances, and vandalism of 2020 to be just the start of a long cycle of turmoil that insurance underwriters and loss control teams need to address. Insured losses across at least 20 states from the protests surrounding the death of George Floyd tallied more than $2 billion. Insurers are using advances like IoT technology to help their customers rein in risk. Insurers like Church Mutual are going even further with new monitoring services. But advances like these mean underwriting teams may be targeted for redlining by regulators.
  5. Touchless customer journeys demand new approaches to democratize insights. Automation isn’t replacing humans on the insurance side, but it is changing their jobs. Insurer are also challenged with wrangling data from multiple silos as they seek a broader view of customer needs and behavior. Mature organizations are investing in behavioral science as part of the advanced commerce capabilities. “In 2021, firms must deploy insights change agents with key human skills in existing positions at the individual contributor, manager, and/or director levels.”
  6. Financial flexibility takes center stage. COVID-19 spurred the introduction of payment holidays — but cash-strapped consumers long predated the pandemic. Legacy systems will be an obstacle to cash-flow flexing. Core systems’ automation/decisioning rules were not designed for leniency. Insurance tech and finance teams will put core vendors and system integrators on the hook to deliver options that take Selective Insurance’s PaySync even further with predictive and autonomous payment programs.


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