On May 3rd of 2000, then president Bill Clinton wrote a memorandum to the heads of executive departments and agencies within the government. In the memo, he said, “Memorial Day represents one day of national awareness and reverence, honoring those Americans who died while defending our Nation and its values. While we should honor these heroes every day for the profound contribution they have made to securing our Nation’s freedom, we should honor them especially on Memorial Day.”
The insurance industry is undergoing an incredible transformation. We’ve been saying this for some time, so we were really excited to attend an entire event dedicated to the changes occurring across the market. From new products, emerging technologies, digital distribution and InsurTech, to the emerging autonomous revolution, Dig|In: The Digital Future of Insurance, covered all of the hot topics impacting the insurance industry.
The Financial Times Live Insurance Innovation Summit: Exploring New Technologies, Products and Processes held in April highlighted the major challenges facing insurance organizations today, mainly the need to embrace new technologies while still foundering under the load of “legacy systems, outdated processes and bloated organizations”. For readers of this blog, this isn’t exactly breaking news, but don’t lose heart. This event was chock-full of powerful insights.
We recently attended the Auto Insurance Report National Conference (AIRNC) 2017. Steered by the seasoned industry professionals of Risk Information Inc., the objective of the event is to introduce new ideas and bring together industry innovators. They didn’t say it, but we think this is how the future of the insurance industry will be shaped, by incumbents and innovators coming together to map the industry’s way forward. And we’re backed up by solid conference data. Read on to learn more:
Consumers are changing not only the way they purchase insurance, but the products they buy. Facing previously unheard of risks, such as threats from cyber-attacks and identity theft, as well as an emerging connected and autonomous world, consumers are seeking new types of coverage. In a recent study, Bain found that 70% of consumers even want to purchase related services from their insurer, such as home security monitoring.[i]
According to McKinsey, insurance is entering a customer-obsessed era.[i] To outcompete, many P&C insurers spend more than 15% of their annual revenue on marketing, hoping to establish their brand as a foremost caring provider in the hearts and minds of target consumers.[ii]
Carriers and their agents may have a rocky road ahead. According to the Bureau of Labor Statistics, the median age of an insurance agent today is 44.5,[i] putting the highest percentage of the agent workforce on the road toward retirement.[ii] In fact, a quarter of them are predicted to leave the workforce by 2018.[iii]
We’ve been talking a lot about innovation recently, and with good cause. The ability to rapidly innovate is no longer a someday proposition, but an immediate concern for insurers as they grapple with gaining market share in the current environment.
P&C insurers are starting the year strong with policy holder surplus hitting a record value of $688.3 billion,[i] but a number of factors, including a soft growth market and a low-yield investment environment, are pushing insurers to cut costs.
The explosion of the on-demand economy has created opportunities for a new generation of disruptors in the insurance industry. These InsurTech start-ups have successfully attracted media attention and investor funding, and they aim to take wallet-share from incumbents by digitally distributing fresh, P&C insurance products to customers seeking a more streamlined, personalized way to buy insurance.