Looking Ahead – 2022 Insurance Trends

Related Topics: Digital Strategy, Insurance

by Charles Sybert – 

During the holiday season, I find it important to take a step back from the “new normal” of working all hours of the day, attending nonstop virtual meetings, or showing up for the occasional in-person visits, and reflect on how our world has changed and with it, what we have accomplished, and what the year ahead holds for us. What are the Insurance Trends we need to be aware of and plan for in 2022?

In my mind, this year, much like the previous one, has been an amazing and transformative even with the lingering challenges of the pandemic. Company cultures have shifted to a hybrid or complete work from home models (and are succeeding!); the economy has amazingly adapted to Covid protocols with even more creative and unique offerings intensely focused on meeting the customers on their terms with a frictionless experience; and technologies supporting contactless payments, Telehealth, Distance Learning, and even robotic deliveries grew leaps and bounds.

Sharpening the Saw

Looking forward to 2022, we do not see new disruptive trends emerging but rather a focus on sharpening the saw. 2021 was an exhausting year as companies continued with their journey to pivot away from older technology and onto platforms that enable work on a fully digital world, workforce adapting to onsite and remote office set-up, and IT shoring up infrastructure. In 2022 we see a further honing of the technology landscape to maintain competitiveness.

Additionally, in 2022, companies can no longer ignore what has come to be known as the “Great Resignation.” It is imperative that talent attrition – highly sought mid-level resources with the depth of skills and experience leaving for greener pastures and taking with them trial knowledge -be addressed if companies want to continue to be successful. This Insurance Trend will become a top agenda item in Senior Leadership strategic conversations alongside other big-ticket items like technology investments, mergers/acquisitions, and the implementation of the next new shiny toy.

Enhanced Digital Experience

Most insurance companies will say they have a digital presence because they have a website, a mobile application, and email marketing. That would have been true if we were talking 5 – 10 years ago. Today customer expectations have grown exponentially based on experiences from leaders in the customer experience space like your Lemonades, Amazons, Carvana, or Starbucks. For example, chat functionality was a new feature a few years ago but now has evolved into a 24 x 7 support tool providing relevant answers based on the contextual experience of the user. Consumers are now demanding the ability to perform more actions themselves, which can be challenging for insurance companies when trying to expose legacy systems to the digital arena.

The digital experience is no longer one of education or just about starting a sale. The focus must be on a new all-encompassing and comprehensive channel to perform end-to-end transactions in a frictionless and simplistic manner. As the economy embraces gig work, the hours of providing service to your customer are no longer 9 to 5. For example, teachers work 7 to 3 and tend to need support services at 9 or 10 P.M. after finishing grading papers. Uber drivers may work an overnight shift and have downtime at 3 A.M. Who will support these customers when your 9 to 5 staff calls it a day – will it be you or your competition?

Third-party data source

Creating a personalized experience requires a significant amount of data which can become very challenging if the visitor is a prospect and no profile has been built. The use of third-party data has become increasingly powerful to know your prospect with very little information. Today it is possible to use a phone number to look up the prospective residence and then use the residence data to look up the registered vehicles and drivers for the residence. The prospect can then select the desired drivers and vehicles, eliminating the tedious data entry task and meeting the consumer demand of a frictionless experience.

Don’t let the data value ‘fall off the table’ by not having a thoughtful plan of how to store and later reuse the data. Gaining the insight of a prospect during the acquisition phase is powerful, but building models for consumer predictive behavior, understanding how to morph the products into targeted focus or predict losses becomes a game-changer. Leveraging the data to build a 360 view of the customer portfolio will propel the company into the future.

Increased use of Artificial Intelligence

AI is no longer an optional technology to have. It will need to be a must-have if your business is to have staying power. Insurance companies are rebuilding their operating models with AI/Machine Learning at the core. AI is transforming the Insurance Industry. For example, Mitsui Sumitomo Insurance has built an AI power agent support system that reviews client propensity to purchase and provides almost 1 million leads per month, increasing agent productivity between 20% and 130% compared to a conventional sales model.

With the move to a 100% digital sales experience, the demand for an always-on resource to answer questions is now expected through a chat or other digital means. Staffing the necessary skilled resources and ensuring consistent messaging is becoming increasingly difficult. To meet this demand, Insurance companies are investing in AI Chatbots throughout the sales process. These chatbots provide the first line of communication using natural language processing capabilities to converse with prospects. The bot can answer basic questions and refer more difficult items to a smaller group of resources.

One of the most significant complaints raised by consumers and regulators is the accuracy and fairness of claim payments and management. With recent advancements in natural language processing and computer vision to read documents, AI can now be trained to review claim files and objectively identify deviations from the claim standard. This will improve the transparency of the process for consumer rights groups and satisfy the ever-looming regulators.

Data is the new currency

Harnessing the power of AI requires a robust enterprise data strategy pulling together fragmented poor quality data across often disparate siloed business units and lines of business into a single usable format. No longer are data warehouses being updated through batch cycles sufficient. Now is the time to invest in data tools that can catalog, define, and manipulate data in a crowdsourced manner.

Getting the data to be near real-time will enable AI and the entire digital experience from the front end of presenting the customer cross-sell opportunities based on prior purchasing history, expediting claim processing through automated processing, and providing a comforting voice with empathic knowledge of the customer’s experience. Harnessing the power of the customer’s interactions with a large insurance carrier and creating a personalized experience builds customer loyalty and referrals.

Talent Retention and Maintenance

While it is not a direct technology trend, an emerging trend is talent retention and acquisition. According to the Harvard Business Review “Employees between 30 and 45 years old have had the greatest increase in resignation rates, with an average increase of more than 20% between 2020 and 2021”. Combining the great resignation trend with a significant attrition rate in the group of highly skilled, tribal knowledge owning resources who support legacy systems, then you have Insurance companies battling to remain open due to staffing issues and not even business-related challenges.

Solving this challenge will require a shift in management philosophy to providing personalized employee initiatives. This can range from:

  • Flexible and evolving hybrid work protocols
  • New office designs meeting the new hybrid models
  • Improved mobile technology to support the on the go mobile worker
  • Investment in upskilling employees in the latest technology, particularly data science, artificial intelligence, and cyber security
  • Employee empowerment to simplify the work environment
  • A gig enabled work environment

Developing a strategy for staff retention must be based on objective data, which is difficult to gather due to natural biases and challenges in collection due to departing employees. To achieve success, an investment must be made in collecting root cause analysis from departing employees. The reasons can appear to be obvious or minor, but a small change in a policy or protocol can impact retention. The most expensive part of employee engagement is not acquisition or even the benefits. It is the replacement costs. There must be effort expended to quickly replace the resource and train the new resource and allocate time to become proficient. This process can become even more complicated when legacy systems require experiential training instead of knowledge to become proficient.

Use 2022 to Future-Proof Your Business

I am looking at 2022 as a year of calibrating technology and culture into a solid foundation that future proofs the business. We will continue to see Insurance Trends that enable wider adoption of impactful technologies like blockchain, but for these to be successfully harnessed, the foundation items like enterprise data usage, highly integrated service-based core systems, and full automation of transactions need to be implemented.

Focusing on aligning the technology capabilities to meet digital needs with the support of a highly talented and focused team will create an environment that embraces future technology in stride.

Read more for more of our views on Insurance Trends for 2022 and beyond.

Subscribe to get the Latest Updates

Enter your email address below to get the latest news and updates from RCG.