By: Tara Kelly, CEO and Founder, SPLICE Software
- Economic recovery will seem to move at a slower pace: In a sense, this will be an optical illusion. In 2022, the insurance industry will continue a strong recovery from the pandemic doldrums in North America. But the pace will seem slower in comparison to 2021 because this year, carriers and agencies bounced back from a much steeper decline. Expect a slow, steady recovery in 2022.
- Tech projects accelerate: By some estimates, digital transformation advanced 10 years during the pandemic. But many insurtech projects were put on the backburner as IT teams focused on equipping remote workers. The pent-up demand for progress will be released in 2022 as insurers eagerly reengage in delayed insurtech projects to deploy insurance technologies. The pace may vary among insurers due to considerations like cash position, but it’s an opportunity for tech-focused companies to pull ahead in market share.
- Vendor-partner relationships intensify: The success of remote work during the pandemic showed that people can share objectives and responsibilities without sharing office space. Look for that logic to be applied to vendor and partner relationships as decision-makers consider build vs. buy options. If you can connect with vendors, consultants, partners, etc., and work together seamlessly from different locations, the relationship isn’t meaningfully different than working with remote staff.
- Greater emphasis on culture and values: Silicon Valley used to be defined by its iconic perks — ping pong tables, catered meals, rock-climbing walls, etc. But remote work revealed what really matters in a company culture: shared values. In 2022, companies will focus more on their culture and values — the principles and habits that got them through the worst of the pandemic. And related to point #3, they’ll look for partners and vendors who share their values.
- Enhanced focus on the entire customer experience: The pandemic changed insurance buyer priorities, so insurers will intensify efforts to understand customers’ needs, challenges, aspirations and decision points. They’ll reach out with Net Promoter Score (NPS) and customers satisfaction surveys to better understand the customer journey. Smart insurers will reach out on multiple channels because the day of single-channel surveys (e.g., phone only) is over. You’ll have to do outreach via phone, text and email to get the insight you need.
- Getting the right data and the right to use it: We’ll see a closer linkage between privacy and consent in the insurance industry next year. We know insurance buyers are willing to share data to get something they value. They are inviting insurers to be a part of their lives, which is a huge opportunity to establish higher-quality touchpoints and deliver better customer service. Insurers need to make sure they not only have the appropriate data but also the right to use it by obtaining customer consent. This will be a higher priority in the coming year.
- “Telematics for people” makes inroads: It’s possible the discussion of vaccine mandates helped break down a barrier, but whatever the cause, look for telematics-style data gathering methods to extend further into consumer health and lifestyle in the coming year. Platforms like Life.io can help insurers gain more data on customers, yielding insight. Customer permission will help insurers not only recognize policyholder uniqueness, but have the ability to act on it which in turn will lead to more personalized insurance solutions at better prices and a competitive advantage.
- Assume something has changed in policyholders’ lives: It’s a good bet since the pandemic disrupted everything. In North America, policyholders may have bought and/or sold cars and homes, added a camper to the mix — or sold everything to take a hiatus so they can backpack around the world. Insurers may find opportunity in short-term policies (to cover storage units, for example) and other lines of business related to changes that occur as the world reopens and people reevaluate their lifestyles. Insurers can assess new needs during customer interactions.
- Cybersecurity will continue to play an enormous role: Insurers may see an increase in small businesses looking for new policies as owners and executives perceive increased liability exposure due to cybersecurity concerns. Devices are made all over the world, and data can be stored and accessed from anywhere. Look for smaller businesses like restaurants to seek Errors and Omissions coverage since they are tracking customer data and may therefore be vulnerable to a breach.
- Carriers explore underwriting policies for a connected world: Insurance carriers enable innovation by erecting guardrails and safety nets that make businesses and consumers comfortable enough to embrace new technologies and products. We have all the advanced technology we need to live in a completely connected world (with smart appliances ordering household staples, etc.). For the right price, we can even become space tourists like Jeff Bezos. But we lack the comfort level to embrace all of our capabilities. Insurers can change customer behavior by socializing risk, and in the coming years, they’ll begin to do so, defining the future of insurance.
Who says insurance isn’t sexy? It’s possible 2022 will be the year insurers embrace their inner “Q,” the iconic James Bond character who provides gadgets to help secret agents face risky situations, with insurers providing confidence to policyholders instead. Opportunity awaits in 2022, and while anything can happen, insurers know better than anyone that it’s best to be prepared!
Tara Kelly is the President, CEO and founder of SPLICE Software, with offices in Calgary, Alberta and Chicago, Illinois. SPLICE Software serves insurance companies, retailers and other enterprise companies through intuitive communication software services that enhance customer experience and enable better operations delivery. Learn more about SPLICE’s solutions here.