At the 2022 PIMA Summer Insights Conference, PIMA members gained valuable knowledge about the top trends shaping the insurance industry.
The Top Trends and Knowledge From the 2022 PIMA Summer Insights Conference
Every industry goes through an evolutionary process. Insurance is no exception. That’s why it’s important to identify trends early enough to stay on the leading edge of what’s coming next.
At this year’s PIMA Summer Insights Conference, presenters from Majesco
shared a wide range of trends in the insurance world. Their insights show that insurance is moving in exciting directions, often prompted by changing consumer and business needs, advanced technologies, customer service expectations, and economic uncertainty.
Below are some of the more compelling insurance highlights revealed during the conference:
1. Insurance products are including more value-added services.
“Holistic” isn’t just a concept that’s becoming important in medicine. It’s becoming essential in insurance, too. Customers want more holistic experiences when it comes to the benefits provided by their insurance products. In response, insurance providers are offering a bevy of value-added services to their plans, policies, and packages.
During a discussion at PIMA, Denise Garth, SVP of Majesco, shared a personal anecdote about the advantages of value-added services. Garth’s home insurance provider now schedules her residential HVAC and other maintenance checks on her behalf. This means she can bypass the hassle of setting everything up on her own.
Other value-added services from insurance carriers also aim to make policyholders’ lives easier. Some other value-added services reported by PIMA members include caregiving services, risk monitoring, discount programs, and roadside assistance. According to PIMA research, many value-added options are sold through affinity channels
. The bottom line is the sky is the limit when it comes to the types of value-added services that can be folded into traditional insurance.
2. Insurtech is merging back into fintech.
Milliman’s presenters were clear about one thing: Insurtech and fintech are moving closer rather than farther apart. This only makes sense because they’re both on substantial, tangential growth paths. Between now and 2030, the value of insurtech is anticipated to increase by a compound annual growth rate of 46.1%
. In contrast, the value of fintech should rise at a CAGR of 19.8%
from 2022 to 2028.
Together, insurtech and fintech are altering how people and businesses engage with insurance and insurance carriers. For instance, automated underwriting has greatly enhanced the overall consumer experience. The same can be said for claims integration and integration with IoT solutions. Additionally, embedded insurance has made a striking appearance.
Embedded insurance is altering the way people think about buying insurance. Because embedded insurance is bundled in real time during the purchase of another product, such as a vehicle or auto club membership, it has immediate relevance and worth. Consumers aren’t required to take extra steps to get coverage.
3. Parametric insurance is popping up.
Since early 2020, insurers everywhere have seen an uptick in interest for parametric insurance. Parametric insurance insures against a well-described event. The event could be a specific kind of natural disaster, as in the case of a Category 5 hurricane or an EF4 tornado. Or the event could be medical, such as a business interruption caused by a global pandemic.
Unlike traditional indemnity-style insurance, parametric insurance coverage offers a policyholder a set amount if the event occurs. Some of the applications for this type of insurance include property catastrophe coverage, business income coverage, and travel coverage.
The inherent flexibility of parametric insurance appears to be driving some of its popularity. Currently, many insurance providers are experimenting with ways to bring parametric insurance into their product choices.
4. Insurers are leaning on the power of advisory organizations.
From Milliman Appleseed to Insurance Services Organizations, plenty of advisory organizations are offering assistance to insurers. From a general point of view, an insurance-related advisory organization assists multiple insurers in their rate-making activities. Therefore, the advisory organization’s role is to work with insurers to limit regulatory risks and enable faster growth.
Insurtech and startup firms are especially interested in leveraging advisory organizations thanks to their benefits. For example, a product developer working with an advisory organization can accelerate filing rollouts
across multiple states and up its competitive edge thanks to faster product recognition and adoption.
Advisory organizations also offer advantages for insurers. It costs less and requires fewer resources to adopt products with the collaboration of an advisory organization. Additionally, there is a reduced risk of regulatory disapproval and increased certainty for filing approval.
So much is happening in insurance right now. The direction the industry is headed will continue the pattern of elevating the insurance experience for all stakeholders.Become a PIMA member today to stay up to date on all the latest trends impacting the insurance and financial services industry. Published on September, 6, 2022.