A new year has begun, and it’s the perfect time to look forward and anticipate what’s coming next. While it’s impossible to predict what 2020 holds, we have a few ideas about where you should focus your energy. Being prepared for what’s next in insurance will help you stick to your business resolutions for the new year.
Whether it’s expanding into new sectors, expanding your team’s capabilities, or developing and implementing new insurance technologies, Patra stands at the ready to help. Here’s where we predict the industry will head this year.
1. Changing regulations lead to emerging industries in need of insurance
As the regulatory environment around specific industries shifts, new startups and related businesses are rapidly emerging. These businesses, just like any other business, will need commercial insurance protection. Because of the complex nature of some of these products and service lines, it can be difficult to determine exactly how to write these policies.
Cannabis is currently legal for recreational use in eleven states and the District of Columbia, and 22 other states have broadly adopted medical marijuana. We can expect several medical states to include ballot measures deregulating marijuana for recreational use. As a result, numerous dispensary and agriculture businesses are popping up, many of which need marijuana insurance for crops, stock, and standard business purposes. Because marijuana remains a Schedule 1 drug on the federal level, it can be difficult to determine exactly how to insure these businesses.
Cybersecurity and data privacy also continue to evolve, with the California Consumer Protection Act (CCPA) serving as a model for other states to shift commercial requirements for data security. Not only does this directly impact your insurance business and the way you handle policies, but it has also led to a boom of emerging cybersecurity businesses in need of insurance, as well as a need for “cyber” policies protecting established businesses from data breach damages. Protect yourself and your clients from data breaches by ensuring that you and all your external partners are aware of data regulations as they evolve.
2. Talent recruitment and retention remains challenging
The finance and insurance industries continue to see record lows for unemployment at just 2.2% with the average insurance industry job posting remaining open for close to 100 days. This is largely due to the fact that most younger talent isn’t attracted to the insurance industry, creating difficulties in the hiring process. Most experienced insurance industry talent is rapidly approaching retirement age, with no younger talent to fill the gaps being created.
In order to fill job openings and draw qualified talent away from your competitors, you may need to get creative. Competitive salaries and benefits only go so far; the current workforce expects their employers to go above and beyond to deliver on company culture. Placing individual growth, training, and innovation at the forefront of your employee experience can create a more attractive work environment for new talent.
Part of the reason insurance businesses struggle to recruit is a general impression of insurance as an extremely slow, bureaucracy-heavy business that’s hesitant to invest in new technology and tech-savvy employees. In fact, 76% of insurance businesses acknowledge that their employees are more digitally mature than their organization, and 81% state that greater employee velocity has increased the need for reskilling in their organization
Understanding that your processes and technology contribute to company culture isn’t enough; you need to take action. An insurance BPO partner can not only give your business access to process improvements and tested technology tools, but also gives your team the ability to focus on the work they find most personally rewarding. They also will have additional time to focus on reskilling, training, and personal growth activities to fuel the way your business works.
3. InsurTech fueling insurance ecosystems
Most insurers acknowledge the effectiveness of ecosystem-driven model for service and new business. The ecosystem model is based on the idea that customers typically look for a consistent omnichannel experience to meet all of their needs. In insurance, a customer expects to be able to go to a single source for quotes, claims filing and processing, service questions, policy changes, and renewals. Insurance is also expected to play a role in other service ecosystems, such as transportation, housing, healthcare, wealth management, and B2B services.
In order to build a healthy ecosystem, you need to look to other industry leaders, develop partnerships, and implement and optimize InsurTech within your processes. Most InsurTech innovation is occurring in specific segments of the insurance value chain that are good candidates for digitization—about 28% of InsurTech innovation to this point has been in distribution for P&C and health insurance businesses. As new technologies emerge in other sectors within insurance, it’s worth continuously assessing opportunities to digitize and innovate.
As a leader in InsurTech and insurance BPO, Patra leads the way in innovation for our partners. We develop InsurTech solutions to fill any gaps we’ve identified, in addition to rigorously vetting third-party technologies as they emerge. Because of our unique position working with carriers, MGAs, wholesalers, and retail brokers, we’re frequently approached by InsurTech developers for partnership opportunities. This means we’re able to test, vet, and implement tools to be certain that each technology offers genuine benefits for your business, while creating a truly system-agnostic insurance BPO solution.
Stay on the cutting edge
As you look toward another year and another decade of growth for your insurance business, staying on top of insurance industry trends is critical. At Patra, we take the time to assess which tools, trends, and developments are going to have the greatest impact on the insurance industry.