Looking Ahead to 2024

12 December 2023
Fingerprint biometrics

Laser-focused insight to mitigate risk

Data-layered products are critical for an insurer and its supply chain to really understand the risks on cover while delivering a personalised experience for the customer. By using such products, everyone in the supply chain has laser-focused insight of the risks they are responsible for and with this structured data they can really start to drive risk mitigation. In the coming months we’ll start to see carriers – as well as insurers – using ‘suggestive AI’ and large data interpretation to pull together different data sources to better understand the risk and claim prevention, improving the accuracy of underwriting.

But to deliver this sharper focus on risk mitigation, an insurance business’ tech platform must have the flexibility, control and advanced functionality to plug into multiple data sources and supporting tech innovation via an ever-evolving partner eco-system.

While insurance businesses across the market know that they need to lose their legacy platforms, what’s not being understood is the need for their new core tech platform to be API-enabled. Here it’s critical that a business has access now, and in the future, to access mature feature-rich, best-in-class APIs to support accurate underwriting. Their core tech provider must be linking them into an eco-system that enables them to future-proof their underwriting capability to improve the claims process for the customer while delivering commercial benefits across the risk supply chain.

 Empowering digital identity control

Verified ID has real value for insurers from a business-to-business and business-to-consumer perspective. By streamlining the verification process, it enhances the understanding of customers in a structured manner, including the payment of claims and fraud detection, while at the same time supporting the effective management of suppliers.

That said, verified ID is still pretty new within the insurance sector although the proof of principle is there – just look at industry verticals such as banking where various forms of verified ID capability are in place. This pace of adoption is not necessarily driven by industry appetite but rather individuals and companies buying insurance need to actually subscribe to this type of service. Let’s not be complacent though. Insurance businesses must be thinking and acting ahead of the curve, making sure that their core tech platform has the flexibility to embrace ID innovation.

Without doubt, insurance businesses and insurtech partners are rising to the challenge to empower individuals and companies to have full control of their digital identities without relying on third parties – it’s a logical phase of the digital revolution. Ultimately the pace of adoption for true decentralised verified ID such as the Microsoft offering will be driven by consumer demand but as an industry we must collectively strive to support and deliver this autonomous digital security experience.

 Specialist insurance leapfrogging technology

Emerging markets is an interesting one for the year ahead – expect to see the further growth of microinsurance and specialist insurance that reflects bespoke customer need in the face of an evolving world. Complex commercial insurance is becoming a growing area of GWP growth within the insurance industry and its role is essential in supporting and securing the infrastructure of the global economy. Take for example agricultural insurance and its growing reliance on satellite imagery and real-time data to underwrite and manage climate and other associated risks. Consider too, niche areas like commercial drone, SME and cyber insurance where specialist knowledge and coverage are essential.

Many traditional markets are saturated as customers move between insurance provider for a penny saving here and a penny saving there. Consequently, it can dissuade insurance businesses in these markets to be disruptive as the margins are so small. It’s why the continued development of the African embedded and microinsurance market will be one to watch. Here ‘disruptors’ are really paying attention to what their target audience really wants and needs when it comes to agile insurance products.

What’s exciting is that emerging markets typically leapfrog technology. Insurance businesses tapping into these new opportunities know that the core tech for their administration systems must have the ability to lean into future innovation. They know their platform has to have the functionality to test and learn new products and critically get these products to market, fast while supporting a high-quality user experience. It’s an exciting space as tech partners who can help their clients realise their technological ambition are playing an integral role in transforming the consumer experience of insurance.

As published by Insurance Edge here.

If you’d like to find out more about our insurance software and how it has been designed to help you get innovative insurance products to market quickly and easily, get in touch with our team.

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