‘Tis the season to look back at 2023 and examine what we can do to make 2024 even better for insurance organizations. This blog is a new year’s nod to people who are passionate about the evolutionary impact of insurance technology.
Alex Zukerman, the Chief Strategy Officer of Sapiens, said: “I’m gratified to contribute to a sector that Deloitte recently described in their 2024 projections in the insurance industry with words like ‘society’s financial safety net’, ‘greater social good’, ‘mitigating loss’, ‘elevating purpose’ and ‘digital modernization’. These attributes resonate with me because they dovetail with our mission to make a positive impact on a global scale.”
Here are the top seven trends for 2024 in the general insurance sector, from Sapiens’ perspective as an industry leader and trendsetter.
1. The insurance industry’s role as ‘society’s financial safety net’ is growing due to increases in cybercrime, climate change and financial and political instability. Insurers need to take proactive transformation efforts to prevent losses from happening.
More than ever, insurers face a greater emphasis on security provisions by vendors. This is driven by increased risk as well as security audits and regulatory pressures. To meet these challenges head-on, insurers must shift toward proactive transformation efforts that prioritize preventing losses rather than merely reacting to risks. The need for heightened security measures has become paramount.
2. Insurers can achieve even greater social good by embracing the social responsibility of mitigating loss severity and reducing life and non-life protection gaps in global markets.
In many countries there is a significant protection gap, where a large portion of the population lacks access to insurance coverage. Insurers can play a pivotal role in reducing this gap. By offering affordable and accessible insurance products, insurers can mitigate the severity of financial losses from unexpected events. There is a growing demand on government for social welfare, retirement provisions and healthcare, which is unsustainable in many global economies, therefore insurers are stepping up to minimize the gap with premium forgiveness or short-term suspended billing.
3. The shift to a more customer-centric business model will require advanced technology adoption and changes in company culture to help minimize siloed interactions and increase access to customer data.
An innovative digital engagement model is essential because a single customer view is not enough to give customers a better user experience. A digital, customer-centric engagement model needs a modern technology framework to underpin it, and this cannot happen in a silo. Machine learning and AI must be leveraged to provide actionable insights to the customer.
4. Insurers are transforming to achieve customer-centricity and elevate purpose. Enterprises need to transform their tech infrastructure, products, services, and business models, to fuel profitability and stay relevant.
To boost loyalty and profitability, insurers need to offer more digital enablement especially for younger demographics who have different expectations of customer experience than older generations. They want a fully transparent, seamless customer journey, just like they have become accustomed to in the convenient world of online commerce. This omni-channel capability and support can only be delivered through advanced technology adoption.
5. Data development and ecosystem partnerships are key ingredients of a sales-centric evolution.
To achieve the efficiency gains needed to move forward into 2024, insurers must integrate the development and enhancement of core digital data and analytics, embedding more analytics into their workflow to increase automation.
6. Technologies like generative AI and actionable insights are needed to achieve this level of transformation.
Generative AI is poised to revolutionize the insurance industry. Failing to leverage the transformative potential of this new era of AI could mean slow adopters can no longer compete.
7. What alternative core-system enhancements are available to insurers that consider replacing legacy systems too difficult and costly to undertake?
Replacing legacy architecture with a modern, core system provides significant benefits, including low-code / no-code to enable rapid implementation.
One thing is certain as we look back to look forward: growth isn’t just seasonal. It’s a constant evolution, especially in the insurance industry. Wishing you a new year filled with growth and discovery.