Property Casualty Insurance Research Outlook 2022
2022 RESEARCH THEMES
The property casualty insurance industry continues to change rapidly to respond to new technologies, changing business models, the explosion of data and the need to digitize and innovate across every aspect of an insurance company.
Property casualty insurers are carrying on their digital transformation journey. Over the past decade they have shifted their focus in many domains:
Customer and Distributor Experience: The customer, including the agent, is at the center of the property casualty insurers’ digitization efforts as they look to create sustainable differentiation. For agents, it’s all about driving ease of doing business. For policyholders, it’s about delivering expanded services, more frequent (possibly continuous) interactions, and a simpler engagement process. To achieve this digital objective, property casualty insurers need to offer a highly intuitive online experience.
Value Proposition: Periodic interactions focused on billing or renewal while required. But insurers passively waiting for an event to trigger a reason to engage is rapidly becoming old school. Insurers are using automation, business rules and data to more actively engage, creating a differentiated customer experience.
Pricing: Traditional tier-based pricing is not any longer relevant in a market where the granularity of data property casualty insurers can leverage allows for a more sophisticated approach to price risks. An increasing set of third-party data sources allow insurers to more accurately assess risk and calculate the “price for one”. Data management, data governance, and analytics are increasingly becoming tablestakes.
Capabilities: Insurance is shifting from a pure indemnification product, one that provides cash after a claim occurs, to an assembly of services to reduce the likelihood of a claim happening, and providing concierge services after a claim has occurred. Insurers are assembly broad ecosystems of digital services to differentiate the value proposition – which requires an increased focus on orchestrating processes and data.
Orientation: Insurers are moving from a task-oriented, human-delivered workflow view to one that leverages data more effectively. New sources of data, such as metadata from photos, or continuous data from IoT are increasingly available and new tools are being used to access that data. Insurers desiring to reach the extreme digital stage understand that the end goal is to integrate relevant data into their information system real-time, and turn this data into valuable information to make core business decisions (underwriting, pricing, claims) without human intervention.
Overall, insurers are rethinking the way they conduct business along their traditional value chain:
With these objectives well defined, insurers continue to identify what technologies can best support their digital transformation journey. Our view on the key domains and technologies that are valuable to property casualty insurers is summarized in five points:
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