This has been an eventful year that leaves me with a mix of feelings. Interest rates have surged, and the economic environment is weighing on consumers and the tech workforce, leaving them feeling grim about the future. Natural disasters continued — in fact,
While these moments are unsettling, 2023 also gave me plenty to feel optimistic about. The fluctuating global economy, the emerging risks, and the evolving regulatory landscape remind us that the insurance industry is here to prepare us for the unexpected.
What I'm looking forward to in 2024
The insurance industry is complex, and the need to move with speed — protecting people and places, physical and digital assets — is even more important in the face of those challenges. What I'm most optimistic about in 2024 is how agile and innovative the industry continues to become.
We're already starting to see this take shape: insurers are
With optimism, I foresee three trends that will gain momentum in 2024.
Trend #1: Predictive analytics will be more pervasive.
Predictive analytics is not a new concept, but it will become more widely adopted in 2024. Insurers see the value of the technology — it allows insurers to make forecasts using historical data and IoT-enabled devices (e.g., telematics). When combined with machine learning and data mining techniques, insurers can identify patterns within large data sets. This helps them identify potential risks and streamline the claims process for customers.
For example, aerial imagery of people's homes, their property attributes, geospatial intelligence, and historical weather-related data help insurers determine the risk factor of a certain area. When combined with computer vision and machine learning, this data insight allows insurers to accurately price their premiums for those who need the coverage the most.
The power of technology has given the insurance industry a leap forward: What was once a process that took weeks or even months to complete, predictive analytics can streamline the underwriting process and significantly improve the efficiency of insurers, leaving customers feeling secure and insured when facing unexpected events in their lives.
Trend #2: Insurers will focus more on simplifying the complex insurance process while building humanized experiences.
Sound contradictive? They don't have to be. In fact, they complement and amplify each other.
On the insurer side, many are utilizing automation and real-time data to simplify the insurance process. Some companies implement the technology to process claims, while some use it for fraud detection and others for policy processing or customer service. Although insurers are at different stages of their digital transformation journey, automation is being used to some degree, regardless of the size of an insurer. By doing so, it frees up valuable resources, allowing insurers to focus on addressing complex and high-touch requests from customers. It is predicted that
The benefits of automation, data and AI trickle down to customers as well. What they're seeing as a result of automated policy processing and claims settlement is a faster response time, real-time assistance and personalized recommendations on coverage options. This is the new reality of the insurance process that customers are quickly getting used to when filing claims, as it takes seconds, not weeks. Also, technology embedded in insurance ecosystems is getting smarter and more intelligent, anticipating customers' further needs based on data. For example, additional coverage options are recommended during customers' purchasing journey: travel insurance when booking flights or property insurance when purchasing a new home.
This new reality challenges insurers to invest digitally and lean on trusted ecosystem partners to meet customers' higher expectations.
Trend #3: The responsible and ethical use of emerging technologies will give insurers a competitive edge.
The world is different since OpenAI posted a blog with the headline "Introducing ChatGPT" in November 2022.
There are still many
I previously talked about the benefits of AI in insurance: its ability to automate claims assessment, detect fraudulent claims, and enhance the customer experience journey is second to none. Still, my biggest advice to insurers is to approach the technology with eyes wide open regarding ethical and privacy considerations. AI can help provide newer and more intelligent opinions, but it's up to the insurer to determine and work with providers that understand the complexity of whether those opinions are reasonable, unbiased, and regulatory compliant in the geographic area in which they are serving customers.
A few final thoughts
I'm eager to see where 2024 will take us and what the future of our industry holds. It will become more data-driven, simplified and highly efficient, with insurers focusing on creating truly humanized experiences with personalized products and offerings.