How will insurance companies stay ahead in 2023?
With the year coming to a close how will we see insurance companies stay ahead of their competition next year?
Is it by expansion to new products/markets or instead with a cautious growth approach?
Is it by investment in technology or people or both? Rapid test/learn innovation or steady progress?
Is it by reducing down claims cost and claims inflation or by maximising revenue opportunities with existing clients?
Interested to hear all your views...
@Areefih @Arnaud Terville @Alan @Patricia Arenas @David Turner
We must be optimistic about insurers working with and embracing third-party technology developers, building solutions that speeds up the decision-making process, working hand in hand to develop data driven strategies and operational efficiencies to reduce claims cost and loss ratios.1
In Australia, which is an interesting market due to size of population (25m) and being dominated by 2 insurers (65% of the market), but we are seeing a few trends, that include:
1) consolidation of core PAS, Billing and Claims systems to reduce the cost to serve the customer and to be more agile in regards to underwriting/pricing of policies. Included in this is strategies to move to hyperscalers and SaaS
2) A huge amount of natural disasters (Floods, mega bush fires, hail etc) means that underwriting polices will need to be more agile and require greater understanding of customer and who they want to insure
3) Continued M&A activity combined with channel sales/white-labelling1
The market is quite interesting at the moment - where the new customer market or new premium that can be received by insurers has reduced.
This means insurers will need to:
- Get more premium - either via going after new segments, new markets or even new financial products like loans
- Recover previous losses to make up for premium - this is either via recoveries (subrogation) or stopping leakage
- Do more with existing customers - with cross-sell and up-sell key either with existing products i.e. multi-car for eg. or new products
There are also new big entrants in the market with the likes of Tesla Insurance and Amazon - albeit small at the moment, but they have a pattern of leveraging all available information to monetise and grow - this will need to be picked up by insurers as well.1
Love it - Darryl rightly points out market consolidation and in-organic growth which will no doubt continue to impact a businesses ability to operate as one joined up organisation. Merging two organisational worlds has people and process implications but often what is overlooked at the power of quickly integrating the data and insights of both businesses to both provide a competitive advantage to the market risk and opportunity as well as quickly build trust with customers through joined up and personal experiences across products and brands.
Shyam nicely identifies he battle between premium growth, market **** and loss ratio seems to be at pivotal point for the market. Understanding how you can sell and convert new business whilst truly understanding the loss propensity and risk of that new business should go hand-in-hand but it often doesn't. The ability to continue to break down the decision silos of underwriting, claims and sales distribution teams with a trusted enterprise view of risk, opportunity and insights data is going to be increasingly important. Protecting loss ratios comes from the constant feedback loop between claims & recoveries into underwriting and sales teams to inform product strategy, ratings and risk assessment. Is this happening enough in your business?0
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