What do insurers need to know in 2022?
The last two years, we’ve experienced a period of unknown risk and a rise in health concerns. This led to more people scrambling to purchase insurance, but were insurers ready to serve these customers?
85% of insurance CEOs said that COVID-19 has accelerated the digitalization of their operations, but how will digital continue to shape the insurance industry in 2022 and beyond?
Digital transformation won’t just be a temporary solution while offices are closed, it will be the way insurers continue to stay in business as the world moves forward.
Insurance Customer Experience Statistics
Insurers aren’t really selling products, they’re selling experiences. Yet, most times, we see that customers want to avoid these experiences.
Less than one-third (29%) of insurance customers are satisfied with their current providers.
In a session at our recent Vision 2021 event, we posed the question, “How can insurers make sure they get the customer experience right when the product they sell is intangible, complicated, and is seen as a necessary evil?”
Ultimately, insurers need to digitally transform their business so that customer interactions are no longer slow and frustrating, but rather, what they were intended to be: simple and helpful. So even though customers might not necessarily want to interact with their insurers, the interactions aren’t painful or exhausting.
But this is no easy feat.
Customers have grown used to excellent digital experiences and often compare them with the ones delivered by their insurance providers:
- 41% of consumers say they are likely or more likely to switch providers due to a lack of digital capabilities.
- 15% of consumers identify lack of digital capabilities as the topmost challenge while interacting with insurers.
- Almost 75% of customers who attempted to purchase insurance online reported problems.
- 88% of consumers demand more personalized insurance products. 21% of insurance customers say that providers do not tailor their customer experiences at all.
- J.D. Power 2020 U.S. Auto Insurance Study found that insurance company websites were more important than agents in terms of customer satisfaction with client interaction and service for the first time.
Insurance Technology Statistics
It’s not enough to simply catch up to customer expectations, insurers also need to be ahead of new trends and technologies that can continue to improve these experiences.
- By 2025, 95% of customer interactions will be powered by chatbots.
- By 2025, it’s estimated that the number of connected, smart devices will have reached more than 50 billion.
- 69% of consumers would be willing to have a sensor attached to their car if it would lower their premiums.
- 67% of insurance CIOs said that SaaS would transform the industry in five years or less.
Insurers will need to also invest into technologies that will help increase business resilience by improving internal operations and protect against emerging risks.
- Currently, 25% of every premium dollar is consumed by operating expenses, a pattern that has held for the past 10 years or longer. These expenses have largely kept pace with the rate of growth in premium income among life and property & casualty (P&C) carriers, with both growing in the low single digits over the same time period.
- Automation can reduce repetitive agent work by 80% and cut claims processing time by 50%.
- By 2030, underwriting as most businesses will cease to exist. It will be replaced through automation, machine learning, and deep learning models.
Insurance Cybersecurity Statistics
Policyholders trust their insurers to protect what’s most important to them, this includes their data. But as more companies move online, the threat of cyber attacks grows in frequency and severity.
- According to Cybersecurity Ventures, a business, consumer or device is attacked every 11 seconds and it’s only predicted to get worse. By 2031, they anticipate that rate increasing to an attack every two seconds. Especially with more employees working from home, insurers will need to consider how to protect their data and business. https://www.forbes.com/sites/theyec/2021/08/17/the-future-of-cybersecurity-insurance-policies-that-follow-the-risk/?sh=66a035525f5b
- The Swiss Re Institute estimates that global economic losses from natural disasters from the first half of 2020 are around $66 billion. This figure is above the previous ten-year average, and second-highest on record for a first half-period since 2011. Insurers must be prepared for these risks as they continue into 2022.
Experts predict that new COVID-19 variants and waves in 2022 will influence regional variations in hospitalizations, increase the need for booster shots and vaccines, and impact how people seek or delay healthcare.
Insurance Employment Statistics
Customers are not the only ones who have had their expectations raised by digital. Especially after the rise of work-from-home options, employees will be wanting flexible work schedules, even after offices open up again. But according to a survey performed by IDC, insurers expect work-from-home to drop to 0%.
Which leads us to ask, is this the most accurate assumption of talent requirements? Especially considering that:
- The number of insurance professionals aged 55 and older have increased 74% in the last ten years. The US Bureau of Labor Statistics estimates that in the next 50 years, over 50% of the current insurance workforce will retire.
- This will significantly impact insurers as Gen Z workers, born between mid 1990s and 2010, are projected to grow to 51 million by 2030, making up a third of the workforce.
- 90% of Millenial and Gen Z workers do not want to return to work full-time, instead preferring some kind of hybrid model.
- Research from Citrix shows that young workers can drive an extra $1.9 trillion in corporate profits if given support to adapt to new realities of work.
Ensuring Success in 2022
Digital transformation isn’t going away in 2022, if anything it’s going to prove more important for insurers that want to continue to serve their policyholders.
Want to Improve Customer Experience?
Start by learning the 7 key elements necessary to drive CX transformation and position your business for digital success by downloading the latest InfoBrief from IDC >
