Insurtech and Environmental, Social Governance (ESG) are impacting on insurance, with trends including the global climate agenda and the emergence of new technologies such as IoT and data analytics. Jean Rea, Partner in our Consulting practice looks at some of the key trends.
While the insurance sector is not typically considered a forerunner in terms of innovation relative to other sectors, insurers are increasing the pace and breadth of innovation. In response to the pandemic, the insurance sector demonstrated huge resilience with their ability to adapt and innovate to overcome the obstacles presented. Many insurers accelerated digitalisation of their customer experience including the transition from the traditional face-to-face models.
For insurers to thrive within the sector, customer-centricity is crucial and as customer expectations evolve particularly when it comes to level of service and personalised products demanded, insurers are continually innovating and embracing the technology available as they continue on their digital transformation journey.
Climate challenges and opportunities
Climate risk is an area that firms need to get right and we’re seeing that because ESG has evolved from being owned by sustainability experts and teams to a C-suite and Board-level concern.
With their influence and predictive capability, insurers have the huge potential to drive positive societal change in this area. Mechanisms available to the industry include taking appropriate pricing actions, managing policy wording, influencing claims spend such as making greener alternatives available, managing assets and investments, and utilising data and experience to inform public opinion.
Key technology trends
Ireland has a strong and vibrant insurtech community. Insurtech considers the use of technology to innovate within the insurance sector. This includes the use of technologies such as data analytics, AI, Internet of Things "IoT" to improve customer experience, efficiency, reduce cost and so on. More broadly the insurance sector is delivering pockets of innovation with top trends including automation technology, embracing the cloud and use of IoT.
What are the key tech trends for insurance in 2023?
The increasing use of data driven technologies and data analytics tools, coupled with the surge in data available has resulted in the insurance sector joining other sectors in moving their business to the cloud. Insurers recognise the advantages including better facilitation of operations, driving innovation and increasing scalability and speed to market which has resulted in the sector embracing the cloud. We can expect the sector to accelerate its adoption and migration to the cloud over the coming years.
A key trend is the investment in the automation of insurance processes. Automation technology such as Robotic Process Automation "RPA", can automate time-consuming and manual tasks, making processes such as policy management, claims processing and underwriting more efficient and accurate. This allows insurers to break prevailing trade-offs between cost, quality and speed.
Internet of Things
There is a continuing upward trend in the use of IoT including telematic devices and wearable devices. By adopting innovative technology insurers can monitor individual behaviours to personalise produces and reduce premium and risk-related costs.
Climate change and the growing use of technology represent two of the most significant trends affecting insurers today. This pace of change is challenging industry leaders like never before.
To find out more about how KPMG perspectives and fresh thinking can help you focus on what’s next for your business or organisation, please get in touch with Jean Rea. We’d be delighted to hear from you.
KPMG in Ireland