5 reflections on the insurance coverage trade in 2021

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As 2021 closes, it seems appropriate to reconsider the predictions we have made for the insurance industry this year. I set out my hypotheses in my post last December, 5 predictions for the insurance industry in 2021. Let’s see how these predictions hold up.

1. New risk models, capacity shifts, new products & prices

2021 was a year of economic recovery, but uncertainty remains. In addition to highs and lows in COVID-19 infection, persistent supply chain disruptions, and inflation, insurers are facing new patterns of damage to property (as it appears to be catastrophic damage related to climate change). These conditions together present a challenge for insurers as they determine which lines of business are likely to offer competitive advantage over the long term.

While insurers pulled out all the stops for financial resilience in 2021, the lever that is getting the most attention is pricing. We have seen this particularly in the commercial property insurance lines, where insurers have raised prices in response to increasing cyber and climate risk. In the private customer business, too, home contents insurance rates rose in response to catastrophic damage.

As predicted, we saw changes in the risk models such as National flood insurance program. We also looked more and more focused usage-based insurance Models, including a product for light aircraft pilots who want weekly or daily coverage. These shifts are an indication of the dynamism of the industry exerting printing capacity and return on equity.

2. Cyber ​​is everywhere

In 2021, we also saw expanded cyber offerings in private customers and Group and voluntary services. These products include coverage for emerging threats such as ransomware and may be more available and customized Risk profiles.

In Accentures Cybersecurity resilience level 2021 reported, executives at companies in 23 industries with $ 1 billion or more in revenue say cyberattacks on their businesses have increased 31% since 2020. Respondents also estimate the associated costs to their businesses at $ 1.3 million over the past 12 months. The vast majority (95%) of respondents said their companies had cyber insurance, and most said they had ransomware claims (57%), business interruption (56%), malicious internal actions (56%), phishing (48%) %) to have asserted. , or denial of service (31%).

The use of cyber insurance by small and medium-sized companies is behind that of larger companies. Freight forwarders are scaling back their capacities and focusing on more established and profitable segments Small business cyber insurance open to new entrants.

Cyber ​​insurance is now at a turning point and poised for rapid growth. Find out more in our latest report Cyber ​​Insurance: A Profitable Path to Growth.

LEARN MORE

3. The digital sales game is more complex

Although the pandemic forced a rapid shift to digital channels, there was no competition for the best direct sales channel. Human connections are more important than ever as customer trust drops. We saw in our Insurance consumer study 2021 that the right mix of man and machine restores consumer confidence and integrates them better.

Although the approaches will be different, the combinations of man and machine will continue to be indispensable for established companies and insurtechs alike. The Germany-based company Wefox, for example, relies on it Agents and brokers in sales and finds efficiency increases in the automation of almost 80% of the administrative processes.

4. The industry deals with inclusion and diversity

Evidence of the disproportionate impact of the pandemic on Women in insurance and the growing influence of social movements like Black Lives Matter have left an indelible mark on the industry. Almost one in three (32%) women who work in insurance left their jobs temporarily or permanently during the pandemic, and 30% of those who stayed in their jobs are considering leaving. Insurers are responding with initiatives to close the gender divide in the insurance workforce and with clear goals to achieve increase the diversity of the workforce. However, these goals seem higher since Competition for talent (diverse or not) is intensifying in many markets.

5. Insurers are reaching for ecosystem solutions in the wellness area

The pandemic sparked a demand for telemedicine visits and other digital health services that many consumers are now expecting. We’re seeing innovations in connected and IoT devices that create new revenue streams with many new opportunities in fitness and wellness.

The health and wellness brands iFit and Headspace were among the 50 Top Brands for Millennials in 2021, but it was Peloton that finished No. 1. Their home exercise equipment and classes are a millennial favorite. And Peloton is leveraging its brand equity to drive subscriptions through partnerships in. to increase Wellness plans for businesses.

While the technical learning curve is short for Millennial and Generation Z consumers, insurers and their related industrial partners cannot afford to overlook the opportunities and needs of less digitally savvy segments. The World Economic Forum advocates measures against emerging risks from misinformation, cybercrime, security and data protection concerns in order to promote digital inclusion across generations.

Outlook for 2022

With the holidays moving, it’s time to start thinking about the new year. I look forward to sharing these predictions and hearing yours.

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