Top Insurance Industry Trends in 2020
For drivers, homeowners, small business owners, and working-class individuals alike, the importance of insurance cannot be overstated. In 2018, Canadians made over $35 billion in insurance claims, including $17 billion in auto claims, followed closely by $7.25 billion in personal property claims and $5.5 billion in commercial property claims.
With a steady increase in claims over the last several years, property and auto insurance rates continue to rise. This trend in the industry makes it even more crucial for individuals to budget for insurance and ensure they have proper coverage for their assets. Here are five more trends that may have a significant impact on the insurance industry in 2020 and beyond:
1. Environmental Changes
One concerning trend in the insurance industry is closely related to environmental and weather changes that are occurring with increased frequency around the entire world. Even minor changes to annual rainfall and average temperatures can cause dramatic effects on flood plains and wildfire paths.
Unfortunately for many homeowners, their insurance premiums are likely to go up because of the increased risk for environmental damage. Be sure to understand how environmental changes could impact your insurance coverage and monthly payments as you look ahead to the next decade and beyond.
2. Artificial Intelligence and Automation
As automation technology becomes more intuitive and convenient, it will drastically reduce the amount of labour and administrative work associated with setting up insurance plans and analyzing insurance claims.
While this will have an impact on the types of jobs and roles within insurance companies, it also makes it much faster and more efficient for companies to create personalized insurance plans and file claims.
AI and automated systems will be equipped with algorithms capable of analyzing risks, processing claims, and adjusting rates in a fraction of time compared to human employees, which will have a dramatic impact on cost-optimization. This will help smaller companies remain competitive against larger providers, giving the consumer more options to choose from.
3. Blockchain and Cybersecurity
As technology continues to merge our everyday lives with our digital identities and online profiles, personal data security is a hot topic. Insurance companies are increasingly placed with the burden of holding virtually all of our most sensitive and important personal data, ensuring this data is secure and confidential is a top priority.
This is where blockchain technology comes into play. As insurance companies collect, process, and store massive amounts of data and personal information on an everyday basis, blockchain allows for secure data management across multiple platforms and a number of parties without compromising the security of your data.
This will make it even faster to file claims and communicate with external stakeholders without exposing your information to external parties.
4. Analytics and Data Modeling
Although personalized insurance plans will ensure individuals only pay for insurance that is directly relevant to them, custom plans will also require unique pricing. As technology becomes more ingrained in our daily lives with the presence of Smartphones, home security systems, and automation technology, data tracking, and collection is much more available for insurance companies.
It is entirely possible that gadgets such as the Apple Watch and the FitBit — which already collect and track health information for registered users — will become applicable when creating personalized health insurance policies.
The same can be said for home automation and security systems, which can reduce insurance rates as you are less likely to be the target of theft and home invasions. As our society trends towards more personalized data tracking with our gadgets, the insurance industry will be able to rely on this information to create more personalized plans based on tangible data.
5. Personalized Products
With an increasing number of boutique insurance companies competing with larger providers, automation and blockchain technology will make it much more convenient for consumers to seek out personalized insurance coverage.
- Are you looking to combine home insurance and life insurance?
- Do you want to add occasional travel insurance to your plan?
- Would you prefer flexible or seasonal coverage?
- Do you need additional insurance for high-value items or for your pets?
All of these options are already becoming a reality in the insurance industry. As automation minimizes internal costs, more companies will be able to offer personalized service. This will give individuals the opportunity to create detailed personalized plans structured around their specific needs.
Not only will you be able to tailor your insurance coverage to your specific needs — meaning you no longer pay for extra services that are not relevant to your lifestyle — but you will also be able to adjust your monthly or annual premium payments and deductibles to suit your budget.
This kind of personalized service will enhance your individual coverage, so you can enjoy your life with the confidence and peace of mind that comes from knowing you are insured.
To learn more about the top insurance industry trends, call Goodison Insurance at 1-800-403-7703 or contact us here.