KEY INSURANCE TRENDS FOR 2021
Working with some of the world’s largest insurance carriers for over three decades, large-scale global trends emerge and recede year-on-year. Today, the industry is amid a game-changing course correction that will transform and redefine ‘business as usual’.
While the pandemic has tested every business continuity plan to be true or false, there has been some silver linings for carriers and insureds. The insurance industry is better prepared for future disruptions and how to deliver tailored solutions for clients on a local and national scale.
At Gallagher Bassett, we have outlined the insurance industry’s key trends for the year ahead. Here’s the key insurance trends that will matter most to businesses and franchises in 2021.
Data, digitalisation and artificial intelligence
Data-driven automation, artificial intelligence and machine learning will remain vital for insurers to meet the level of personalisation businesses and franchises expect from their policies and overall experience. Large carriers are already using innovative solutions to automatically classify and extract data from the claims management process—and this shift to digital has only taken off since March. These solutions remove the need for a paper form or phone call, and allow customers to take photos or videos via their phone and monitor the claim via an app.
Despite digital and automated claims processes driving efficiency to lower operating costs, an industry with an experience-oriented focus will emerge to manage policies and claims not fit for machines. Businesses and franchises want insurance companies to know them as people and have different expectations for different groups. Some may prefer a fast, highly-personalised service whereas others may desire a high-touch and solutions-orientated approach—it’s up to carriers to provide this deeply-personalised customer experience.
Work from home revolution
Even pre-pandemic, we were experiencing a shift to flexible and convenient working arrangements. 2021 will be the year insurers work out how to underwrite the new risks from the work from home revolution. Carriers will look to tailor policies to insure these new risks, such as occupational health and safety, to ensure products are truly fit for purpose.
Impact on affordability
A hardening insurance market will put pressure on capacity and therefore the price and affordability of premiums. There is already evidence of increasing prices for some product lines, such as income protection and health insurance, so businesses and franchises will look to diversify even further to produce business revenue.
Regulatory changes ramp up
Governments and financial regulators relaxed the rules at the height of the pandemic, but the insurance industry should start to see delayed or deferred legislative changes brought into effect from early 2021. For example, Australian regulators are slated to implement the majority of reforms recommended in the Banking Royal Commission before June 2021. The regulatory focus will be extremely important post-pandemic as businesses and franchises become more cautious about their health and financial safety.
Jon Winsbury is Executive Vice President, International of Gallagher Bassett. With 30+ years of insurance experience, Jon is responsible for the strategic direction and growth of Gallagher Bassett internationally, his strong belief in culture and staff empowers the business to continually achieve stellar results.