Expect to see a shift from technology promise and innovation to implementation and delivery
The insurance industry is undergoing a major transformation. Competitive pressures, increasing market and customer demands in the industry, and new players and business models threatening established core businesses are driving constant innovation. However, modernization and digitization remain the biggest challenges for insurers. With all this in mind, which new trends and developments will shape the insurance industry in 2023?With more than 30 years of experience, Fadata, a long-established insurance software solutions provider, has specifically identified his five developments or identified a trend.
1. Modernize the IT landscape
Modernizing legacy systems is one of the core tasks of many insurers. Mainframe systems are very stable and secure, but inflexible. It also prevents you from meeting new business requirements quickly. Only modern systems promise long-term security. Modernization often focuses on technical issues, but realigning procedures is just as important. Rigorous, manual processes are replaced by flexible, automated processes. This also requires a departure from proven working methods and a consequent change of mindset. Without a change in mindset, there is a risk that insurers will only partially capitalize on the opportunities offered by the modernized environment.
2. Use of cloud
Cloud platforms are becoming a widespread standard. Most modernization initiatives today, not just the insurance industry in particular, are embracing the public cloud. A cloud infrastructure with a containerized insurance platform and a cloud-native development environment offers many advantages such as agility, flexibility, performance, cost efficiency, and most of all, scalability. After all, an insurance company’s business develops dynamically with regular peak loads. For example, the expiration date of an insurance policy such as car insurance, or the expiration date of a new policy. Here, in particular, the cloud provides the demand-oriented scalability needed.
3. Emphasis on customer experience
Customer loyalty is declining in almost every industry, including insurance. Measures should be taken to enhance customer satisfaction and customer loyalty. This is why customers are determining the current evolution of the insurance industry. Consumers in the digital age expect digital offers from insurers, such as customer-oriented online access with highly personalized user interfaces. As traditional processes no longer meet the expectations of today’s customers, insurers must increasingly leverage digital channels for tasks ranging from sales to claims processing. A major focus for 2023 will be the development of fully automated or data-driven programs that accelerate the underwriting approval process. Insurance customer satisfaction only becomes truly relevant through the claims process, so getting your customers a rewarding and seamless claims processing experience is paramount to fostering ongoing loyalty.
4. Utilization of the digital ecosystem
Insurers will benefit from the growing importance of the digital ecosystem across the board. The ecosystem provides an opportunity for insurers to combine their insurance products with the products, services and benefits of other service providers. Examples include third parties his providers and insurtechs. Service extensions can be implemented relatively easily and quickly based on the cloud, where insurers can flexibly access data with partners through open interfaces. For example, in the field of automobile insurance, cooperation with repair shops, towing services, and car rental companies can be considered.
5. BUILT IN INSURANCE OFFERS
With an estimated $3 trillion market potential, insurers cannot afford to ignore the embedded insurance trends topic. Customers across the board have become accustomed to convenient, easy and fast package deals, which is a major driver for establishing embedded insurance offers. Alongside other new approaches to customer engagement, embedded insurance helps redefine insurance and the role it plays in people’s lives. Of course, a prerequisite for establishing such an embedded insurance model on the insurer’s side is a modern system landscape with digital process chains.
Sam Knott, Fadata’s UK Sales Director, commented: Throughout 2023, we expect to see a shift from technology promise and innovation to implementation and delivery. Cloud platforms and digital ecosystems enable insurers to shift pricing from customer cost to true value proposition, putting product relevance and customer focus at the heart of their ideology. . Insurers implementing core technologies are at the forefront of the market, offering the ability to enter new markets and products at a scalability rate that competitors struggle to keep up with. Over the next five years this will increase, opening up new revenue streams and ultimately leading to increased profitability. ”
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About Fadata
Fadata is a leading provider of software solutions to insurance companies worldwide. We are on a mission to enable the insurance industry to drive customer engagement, innovation and business value. Together with our customers, we are on a journey to build the future of insurance and impact the lives of millions of people every day.
Fadata has clients in over 30 countries around the world. Headquartered in Munich with international offices in more than five of his European cities, Fadata is backed by Private Equity Riverside and Lowell Minnick.
For more information, please visit www.fadata.eu.
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