The Future Of The Insurance Industry in 2022
The insurance industry is undergoing an ideal storm. Changing customer demands, advances in technology, increases in data, the impact of natural disasters, shifting demographics, and evolving regulations are just a few of the factors combining to shake the industry to its roots. Customers want more from their insurance, whether businesses, consumers, or businesses offering services to consumers, all of them now expect the speed and elegance of digital retail, conducting business after they want, where they require, using the channel of their choice.
Customers are increasingly savvy and ready to compare offerings and costs with the competition in a second. Technology is creating a wealth of recent possibilities. the arrival of huge data creates opportunities for insurers to create the use of unprecedented insights into their end customers’ life, property, health, wealth, and behavioral patterns. Advances in computing are allowing insurers to sift through this data quickly and efficiently, enabling more personalized approaches to risk management, reduced liabilities, and lower premiums reciprocally. the flexibility to access data faster than ever before also allows insurers to settle claims more quickly, what accustomed take weeks and months are now happening in days or hours.
In the past, a standard strategy for Insurance players was to attend for the competition to maneuver first, to work out if a brand new direction was successful or not. But that strategy doesn’t add this disruptive environment with new competitors from outside the insurance space. of these changes have given rise to new players with new ways of working and competitive business models By the time you opt to maneuver, it’s going to be too late.
So, as insurers look towards a very different market in the future, how can they navigate change, and achieve success? In this environment, it’s important to learn fast and, if you fail, fail quickly, so you can learn your lesson and move on. Established players must find ways to be more versatile: to think like a disrupter and act like a start-up, while all the time maintaining a clear focus on the customer.
In times of rapid change, it’s hard for executives to separate fact from fiction, easy to be seduced by the ‘latest trend’, and tempting to be drawn into blindly copying what the competition is doing. But following the crowd is not the answer. The most successful companies, across industries, understand that they have to build a strong and distinctive identity that allows them to carve out their market position, rather than reacting to a market that has been created by others.
Creating such a strong identity means that you must be very clear about the way you will add value to your customers in the future, your ‘way to play’, and also very focused on building the few differentiating capabilities
that will allow you to deliver that value better than anyone else. Once you know which capabilities your organization needs to excel at, you can then develop a capability agenda to take you from where you are today to where you need to be tomorrow.
It’s important to consider how quickly you can build these new capabilities and when you will need them to be mature and integrated.
- Should you build them organically?
- Should you acquire them through M&A?
- Or should you partner with other players?
Being very clear about the specific capabilities you need to excel at allows you to focus your entire organization on what truly matters to your customers and build a powerful engine of growth. Disruption is here to stay, and not everyone will succeed. It is the players who dare to commit to an identity based on what truly differentiates them, who will have the opportunity to shape the insurance industry of the future.