Editor note: this article Part 3 of Greg Murphy’s predictions series addresses the potential for market disruption from data companies, as tech’s largest players move into the property/casualty space. Click for Part 1 and Part 2.)
It is common knowledge that technology is the future of most industries today. From digitized customer service experiences in grocery stores to hi-tech hologram concerts, the race to innovate is on, and disruptors are already making their mark. In insurance, the situation is much the same, as the companies who are digitally transformed and continuing to reap the financial benefits of their forethought.
A panelist at the recent InsureTech Connect 2021 event in Las Vegas, when discussing the future of small commercial insurance, predicted that within consumer facing SMBs, digitization will reach around 70 percent by 2025, and up to 100 percent in cyber. And predictions like this are well-founded, when new and exciting technologies are developing all the time.
The Data Companies Making P&C Easier
Insurers need to be agile when it comes to operations, and this kind of streamlining can be achieved by taking advantage of all that technological innovation has to offer. In 2022, we will see the growing prominence of datasets as the facilitators of new realms of knowledge for P&C insurers, helping them predict and price risk more efficiently than ever before. Data companies have been slowly but surely building solid influence in the insurance space, providing carriers with up-to-date and accurate means to quote better for customers.
Large companies like Google are sure to become key players in this space, nestling up to state firms and offering a helping hand when it comes to data resources. Powerhouses like Amazon and Walmart and Google could even move into simplistic forms of insurance production themselves: though we do not expect a coup for power, rather an extension of their services mostly working in the background for prominent insurers.
Niche Markets More Accessible than Ever Before
In addition, smaller data companies offering sector-specific knowledge to insurers in niche markets, building customer bases in evolving coverage sectors. The key here is not only gathering large amounts of raw data: no matter how accurate it is, if insurers have a hard time extracting the insights they need then it has not reached its full potential. The data companies who provide actionable insights, in an interface through which insurers can quickly and easily access the information they need, are sure to only grow in popularity over the next few years.
As coverages evolve and a growing number of niche markets appear in cyber, climate and more, insurers are obligated to adapt their offering to suit the new requirements of their customers. Moreover, in an industry where change is moving at an ever-faster pace, insurers must be the first to market with new product lines in order to maintain a lead in front of competitors. Data companies can also help in this sense, offering specialized knowledge to certain sectors and focusing their efforts on a deep dive into small pockets of data, rather than a generalized view of broader sectors.
Insurance companies already juggle multiple sectors and assess risk to great effect: but by employing all of the exciting new technology at their disposal, they could do their job better. In a world where new challenges and changes are perennially around the corner, the forward-thinking insurer will take action, rather than remain a sitting duck. By deploying every weapon in your business’s arsenal—from data insights to cloud-native product builders—you will be able to leapfrog competitors in an increasingly cutthroat market.
