The experts at hyperexponential (hx), a SaaS pricing platform for insurers, have outlined six key trends taking hold in the insurance industry.
According to McKinsey’s 2022 Global Insurance Report, around half of insurers globally are not earning their cost of capital in revenue. The global climate has created a number of uncertainties and a tough economic environment
In order to act proactively on these market conditions and adjust their capabilities with speed and agility, hx said the industry will see insurers leverage technology tools to harness data and stay ahead of the competition.
This leads into the second top trend hx expects to see in 2023: competition between new entrants and legacy insurers.
New insurers have been entering the market in recent years, equipped with improved processes and agile methodologies. This has spurred older carriers to simplify their traditional, slower, systems and build newer and more modern technology stacks.
Thirdly, hx said 2023 will see a “war for talent.”
The insurance sector is currently plagued by an ageing workforce, increasing the need for fresh talent. If an organisation wishes to get ahead in the war for talent and attract a young workforce, they must have access to the technology needed to work efficiently and offer a great culture build on values of equality, diversity and inclusion.
The fourth trend hx outlined is the rise in technology-enabled distribution.
hx said it is seeing many examples of tech-enabled distribution throughout the market, from the Amazon insurance store to large brokers and carriers collaborating on API gateways to facilitate risk pricing in the specialty insurance market.
As digital channels multiple, hx said the fifth key trends for this year will be growth and rise of data-driven insurers.
Insurers who prioritise technology adaptation for data management and processes, hx said, will reap the biggest benefits this year.
Finally, the sixth trend hx is anticipating in this new year is insurers leveraging their legacy technologies to enjoy competitive advantages.
Although it is thought to be more essential than ever for insurers to prioritise data-driven technology adoption, this does not mean insurers should abandon their legacy systems. Those that integrate modern technology solutions to leverage the data in existing systems, especially ones with large amounts of data, will do well.
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In October last year, hx saw Optio Group, a leading speciality MGA, join a growing list of insurers and MGAs to adopt its Renew platform.
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