Trends and Factors

With a range of products offered for consumers – from property and casualty to life tightly integrated to local demography – trends and challenges of insurance providers vary vastly. In the US, a variety of factors demands new approaches: the economic slowdown and advent of sharing economy services, the passing of the Affordable Care Act with the expansion of the consumer base, which adds an unknown quantity of risk, and the view of Gen X, Y and now millennials that is significantly different from that of baby boomers, which impacts life and retirement coverages. Factors are different, but the pattern is similar in the rest of the world in developed or emerging economies.

There is a clear divide in the needs of the baby boomer population to those of the younger population.  Automobiles are being designed for keyless entry and start, homes have ramps and elevators – and the trend is going to get even more complex as the speculative nature of traditional sources of energy continues. The majority of consumers that use retail interaction models with their suppliers and service providers expects a greater degree of transparency, ease of switching providers with the least penalty and fine tuning of the products they use depending on their stage in life.

Irrespective of the threat to privacy, prospective clients expect their governments to address security issues while freely sharing their personal details on the web. They also also inclined to accept the notion of someone monitoring their activities 24x7. Such aberrations change the dynamics of risk rating. Extending the same expectations, prospective clients will demand shorter turn-around on policy decisions and claim settlements.

Our outlook indicates that the insurers will look for a fluid business model that provides them efficiency and rate of growth to sustain margins across different lines.  Government regulations is slowly forcing the insurers to disclose more and restrict the amount of business they do via agents and advisors, demanding innovating engagement models with their customers.  Expectation of short time between trigger (request for policy or reporting an incident) to resolution (quote and acceptance or claim settlement) calls for balancing standardization, situation aware risk-reward decision engines.  Insurers will have to look at newer ways of empowerment of their call center representatives – commensurate with the mindset of their policy holders.  There is potential for newer lines of business, like cyber liability and supply chain integrity.

We expect the top end players in the insurance industry to consolidate their position via acquisition, controlling over 50% of the market.  We also expect new business models to evolve to separate ways of customer engagement from traditional processes like claim processing, payment management and support.  Insurers will engage with providers of data from non-traditional sources like Facebook, retailers and search engines or may develop newer point of sale via banks, travel agencies and retailers, if Costco in the US can be treated as an indicator.

Consulting experts at Conexiam have experience in P&C, medical and life in transforming their business model, IT ecosystem and agency management.  We have successfully applied concepts from other industries to improve the operational efficiency or create new customer engagement models.  Our Predictable EA approach develops a clear mapping from objectives to delivery, considering competitive landscape, internal processes and maturity, and partnership needs.  Our team is experienced in IAA, ACORD, TOGAF® and IT4ITTM, and we use these frameworks as a foundation to accelerate organizational change.