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Navigating the winds of change in the insurance business

From the integration of artificial intelligence to societal changes, the insurance industry is undergoing a paradigm shift. Sameer Datye nails it in his blog.

Sameer Datye / March 15, 2024

Let's explore the top trends that will shape the landscape of both life and non-life insurance.

Rise of insurtech

Insurtech start-ups, particularly those initiated by traditional insurers, are making significant strides in reshaping both life and non-life insurance. As funding dynamics evolve, consolidation is on the horizon, while AI-driven ventures continue to attract fresh capital. Specialty lines and innovative products are becoming focal points for reinsurers exploring uncharted waters through insurtech partnerships.

Talent challenges

The insurance industry faces a significant talent gap, exacerbated by a lack of appeal to dynamic young professionals. I have never met a young person who has the ambition of making a career in the insurance industry 😊.

Re-skilling initiatives offer a temporary solution, but the industry must strive to make itself more appealing and contemporary to attract the next generation of talent.

Ecosystem acceleration

Collaboration and ecosystem participation continue to be driving forces in the insurance sector. Beyond core routines, partnerships are expanding to pre-referral needs, helping the industry better understand customers and provide relevant services. The win-win nature of these collaborations is fostering growth.

AI Revolution

Artificial intelligence is poised to revolutionize the insurance landscape, impacting processes across the board. From actuarial efficiency to hyper-aware underwriting, the industry is witnessing a profound change. However, with this evolution comes the imperative for businesses and IT to adapt and navigate challenges related to data, privacy, ethics, trust, and regulatory impact.

Legacy phasing out

While not a new trend, the phasing out of legacy systems is gaining momentum, bolstered by the AI revolution. Cloud infrastructure is gaining traction, even in traditionally cautious and compliance-heavy markets such as Europe. The industry is adapting with parallel implementations to ensure a smooth transition, though compliance challenges persist in the short run.

Wealth transfer dynamics

A monumental wealth transfer from boomers to millennials presents both a risk and an opportunity for life insurance. To retain Assets Under Management (AUMs), insurers must innovate to attract the younger demographic, aligning solutions with their expectations. Simultaneously, support for active aging and wellness routines becomes crucial for older customers.

Geo-political turbulence

Global geo-political disturbances, from conflicts to elections and climate change, challenge the predictability that insurance relies upon. Short-term management and long-term risk mitigation become cross-industry challenges, which require adaptive strategies in the face of uncertainty.

Societal transformations

The interplay between societal changes and insurance is a complex phenomena. Whether technology shapes society or societal evolution drives technological and business changes, one thing is clear – the insurance industry must adapt to just-in-time services. The growth of parametric and embedded insurance approaches, coupled with the reverse integration of insurance services into products and services, is an unstoppable trend. This is true especially in societies like India, where awareness and liberalization will fuel growth.

Embrace change

As we navigate the complex currents, these trends underscore the need for adaptability, innovation, and a forward-thinking approach in the insurance industry. Embracing change and proactively addressing challenges is the way forward.

Sameer Datye
Head, Insurance & Wealth Solutions

Sameer is responsible for insurance and wealth solutions. He actively promotes open ecosystem thinking that powers our WealthMapper and Insurance-in-a-Box platforms. At TietoEVRY, he has a long experience of working within the Healthcare, Insurance and Wealth domains. Prior to this, he worked as a product manager and a brand manager in the food, processing and packaging industry. He is passionate about translating technology innovations to business reality leading to better quality of human life.

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