How will commercial insurance customers be in the future? How can insurers be prepared for the new changes coming? These questions arise nowadays, and although we cannot predict what will happen tomorrow, we can analyze the trends that may come next to be better prepared.
If we focus on commercial insurance, we can see that one critical point is the underwriting process. This is not something that can be done homogeneously, i.e. the same structure for all clients. Depending on the size of the company, different variables that can affect risk. In this article, we will address how to meet the challenges ahead within commercial lines.
1. Higher customer expectations
The pandemic has increased the concern of small and medium-sized companies to have the right insurance in place. SMEs discover that they have this need and therefore create a series of expectations to be met. One of them is that the offer should be adjusted as closely as possible to their reality.
This opens up a golden opportunity to attract and retain this type of customer. Insurers should focus on improving the understanding of the value offered in their coverages, facilitating online underwriting processes, and creating new products (E.g. usage-based insurance).
2. Embedded Insurance
Embedded Insurance consist in offering customized products at the most convenient time for the customer and in a user-friendly way. It is a great way to leverage upselling and cross-selling. We will see more often that while you are buying or renting a good or service, the opportunity to buy an insurance policy will be offered at the end of the purchase process.
For example, after purchasing a software license, it will be possible to take out cyber insurance for SMEs. B2B partnerships will be essential for this entire sales ecosystem to work. And not only that, online platforms that connect and integrate each partner must be created.
3. Customer-centric service
Traditionally, the insurance industry made the customer adapt to the service channels available to the company. In the future, the companies that put the customer at the center will be the ones that survive. In the insurance sector, this will mean betting on hybrid omnichannel (technology + people). In other words, automate as much as possible all those tasks that are simpler and let the agents be the ones to personally attend to, and advise on the most complex and personalized insurance.
4. Technological advancement
If we talk about large insurance companies, we have to place the following scenario: different markets and countries and different businesses’ lines. The truth is this is difficult to manage. To be more efficient when operating, technologies such as AI or machine learning will be vital. All this landscape will lead to more automated underwriting processes, better risk monitoring, and decision- making based on more accurate data.
5. Agile-based model
This business model will consist of optimizing what already exists. In a volatile and changing economy, it will not only be necessary to have a large amount of data but also to anticipate customer behavior.
Collaboration between companies and InsurTech startups, the integration of external and internal data sources, or incorporating more flexibility into the offer will be key to the competitiveness of large commercial insurers. All these aspects united cohesively will lead to higher profits and growth opportunities.
With all these changes coming, you may be wondering how your company can be prepared. It’s a good time to evaluate and analyze whether you have the talent and technology stack required. Developing a medium and long-term strategic plan will help your team perform better when facing these new developments.
If you want to be ready for the future, improve the quality of your data, and optimize your company’s underwriting processes, don’t hesitate to contact us at wenalyze@wenalyze.com
