The National Association of Insurance Commissioners reports that there were 5,929 insurance companies in America and its territories in 2020. This industry is undoubtedly one of the most affected by the pandemic since it is involved in risk management. Market capitalizations decreased, but most insurance market segments picked up in the latter half of 2020. Challenges still exist with climate risk, talent shortage, more regulatory requirements, and managing the balance between human agents and technology, but many exciting trends are worth monitoring. Here are some of the top insurance trends to expect in 2022.
More cyber threats
Cyberthreats and the security measures necessary to counter them keep increasing, thanks to the digitization of more economic and financial systems. Cybersecurity is especially critical in insurance since the financial sector has suffered the second-largest number of COVID-19-related cyber events in recent months. Insurance companies hold a lot of valuable personal and payment information, so it is easy to see why cybercriminals are targeting them. This problem will only persist in 2022, so insurance companies must be highly prepared. Therefore, more insurers will pay great attention to effective training, zero-trust principles, and risk management strategies this year.
There is a lot of pressure on companies to get the customer experience right because clients expect their needs and concerns to be addressed at the click of a button. Indeed, it is estimated that 1 in 3 consumers will simply leave your brand after just one bad experience, even if they like it. It appears more insurance companies have realized this fact, so customer centricity is something you can expect to permeate the industry in 2022. Many insurers will keep using customer experience (CX) initiatives throughout their customer journey to put clients’ needs and convenience first. For example, companies like Cars Protection Plus offers prompt payment on authorized repairs as part of their service contract to enhance the customer experience.
The rise of artificial intelligence
The insurance industry is benefitting significantly from Artificial Intelligence (AI), which is expected to further transform processes like pricing, underwriting, and claims. Many insurance industry employees are also improving their knowledge and skills in AI. As such, AI will have more potential to lower costs, optimize the customer experience, and enhance productivity and decision-making. Furthermore, AI shows immense potential as an essential weapon in the fight against insurance. This fraud detection capability will work best with machine learning because the industry is experiencing a high volume of fraudulent claims. Insurance fraud statistics show that at least 10% of payouts are based on fraudulent claims, but AI will play a huge role in reducing this percentage.
Persisting talent crunch
There is a huge gap between the supply and demand for skilled talent in the insurance industry. Therefore, insurers will continue struggling to recruit and retain top talent in this highly competitive job market. Roles requiring hot technology skills like data science, software development, cloud engineering, and cybersecurity will be the hardest to find talent for. However, insurance companies can pay more attention to work-life balance, reskilling, and remote working to attract and retain top talent.