Key Insurance Trends in 2024
To get a better idea of the ongoing shifts occurring throughout the market, this blog will highlight some of the top insurance industry trends to watch out for this year.
The Rise of Digital Data Collection
As the push for a better policyholder experience continues to take hold throughout the insurance space, digital data collection is becoming more relevant.
Insurers can use digital forms, software, and automated technology to become less reliant on manual data entry and streamline the collection process for both agents and policyholders alike. In turn, it becomes easier for insurers to adopt data-driven premium pricing personalization. This technology has the potential to speed up turnaround times on policy underwriting, claims processing, and more, all of which can enhance the policyholder experience and increase renewal conversions.
However, integrating and managing vast amounts of digital data is not something that all insurers’ tech stacks are equipped for. Insurance companies need to make sure the consumer data they collect stays secure to meet regulatory requirements and retain policyholder trust. However, it also needs to be accessible to the systems and employees who rely on the data to derive critical insights.
Herein is where converged identity access management (IAM) capabilities can help ensure data security and build sustained trust, loyalty, and customer lifetime value.
Availability and Utilization of Customer Data
Insurance has always been a data-driven field, with providers leveraging consumer data to make underwriting decisions, price policies, and manage risk effectively. In the digital age, access to consumer data has grown exponentially, allowing insurers to assess risk to support their decision-making and deeper insights to deliver personalized product offerings.
Today, data is generated through a variety of sources, including IoT devices, social media, online interactions, and third-party sources such as banks and credit rating agencies. Every time an individual visits a website, scrolls on a page, likes a post, or searches for a new insurance policy quote, they’re generating data that is useful to insurers to understand customers’ needs, preferences, and behaviors. Insurance companies can leverage this data to tailor their offerings and services to individual needs.
The sheer volume of data available to insurers has revolutionized how insurers operate, though there are some ethical concerns surrounding the use of sensitive customer data in insurance practices such as financial information, health records, and online behaviors. There is also the security concern around malicious actors who seek to compromise credentials to gain access to this data.
Converged IAM solutions address these concerns, helping insurers secure customer data and credentials, build a unified view of needs across all channels via secure APIs, and then use these insights to drive personalization and upselling campaigns.
Growth of Usage-Based Insurance and Telematics
Another ongoing trend in the insurance space is the emergence of usage-based insurance (UBI). This includes auto policies, made possible with telematics that track drivers’ location, speed, and other data. This can also apply to healthcare and well-being offerings, with health tracker data used to drive life insurance premiums and bespoke recommendations through first and third-party channels.
This is a more personalized insurance offering that’s tailored to the unique driving behaviors of policyholders, which results in fairer pricing and encourages safer driving. Usage-based insurance can also apply to other insurance lines, including homeowner’s policies and health insurance.
Usage-based insurance is becoming more appealing to consumers in the wake of rising inflation. In fact, according to a recent report by TransUnion, adoption of telematics from auto insurers increased by 33% over the first quarter of 2022, with many consumers hoping to save money on their auto policies.
In the coming years, telematics technology will continue to advance, offering more precise behavior data and fair pricing for policyholders. 89% of policyholders in the U.S. are willing to give up more of their data for lower premiums, though insurers must implement IAM solutions to prevent misuse or unauthorized access to sensitive information like a driver’s geolocation or their personal health data.
The Need for High-Touch Interactions
In the age of policyholder-centric insurance, high-touch interactions allow providers to generate meaningful relationships with their customers and offer a more seamless, convenient experience.
Despite the large shift to digital, insurance consumers still place high value on the human touch. For instance, McKinsey & Co. notes that agents and advisors are still the highest-rated channel for insurance customer satisfaction, with 20% of policyholders reporting that they would switch carriers if their advisor left the company.
Through high-touch interactions, policyholders can receive direct support for their questions or inquiries, leading to faster resolutions and better satisfaction.
The Role of Identity-Centric Solutions
Modern consumers expect a seamless and secure experience when purchasing a product or using a service–and insurance is no exception. Identity-centric solutions can help insurers meet these demands, orchestrating the entire customer journey around the policyholder’s unique profile.
Insurers can offer personalized product recommendations, coverage options, and support, based on the customer’s preferences and needs. As a result, identity-centric solutions differentiate insurance companies from the rest of the market, as policyholders feel like the experience was tailored to them.
Policyholders want better convenience without putting their data at risk, so insurers can leverage converged IAM solutions to offer robust security and a frictionless user experience.
