COVID-19 required insurance industry players to move their workflow entirely online, which meant performing tasks such as ID verification, document uploading, loan processing payments tracking etc all at the same time.
Young consumers expect an easy and seamless digital experience from insurers, making developing an embedded insurance experience an imperative for many insurers.
Insurance Evolution
Insurance is a complex industry. Changes often need approval from multiple agencies before being implemented, making innovation difficult to accomplish quickly and effectively. Furthermore, insurers often must work with legacy systems that have become tightly embedded within their operational processes.
In spite of these challenges, the industry continues to evolve and adapt. The 19th century witnessed a boom in insurance offerings--both accident and liability coverage - due to industrialization's expansion, as it brought with it additional risks that required coverage. Insurance carriers responded with package policies which were cheaper and easier for customers to understand.
Many experts have predicted that the insurance industry is poised for significant disruption. To avoid falling prey to this threat, insurance companies should be proactive about building their ecosystems so as to become disruptors rather than targets; this requires collaboration, customer centricity and value orientation as key focus areas.
Mortgage Evolution
Since its creation, the modern mortgage industry has undergone many significant developments and modifications over time, such as economic crises and regulatory reform. But its future looks more promising than ever.
Mortgage loans were once an uncertain endeavor for lenders and homeowners alike. Due to minimal government regulations in place, lending became a patchwork of lenders operating under different rules; during the Great Depression this situation only worsened further for many Americans who couldn't purchase homes due to financial hardship.
Fannie Mae and Freddie Mac provided liquidity to the mortgage market by purchasing mortgage-backed securities that allowed banks to reinvest capital back into more mortgage lending, further fueling the housing boom of the 1930s and 1940s.
Digitalization
As the insurance industry undergoes ongoing transformation, digitalization is becoming an essential element. This includes upgrading service channels, modernizing legacy applications, automating manual processes and taking advantage of emerging technologies and alternative data sources for faster risk evaluation.
However, insurers must strike a careful balance between profitability and purpose as they embark on their digitalization journey. A digitalized technology stack may save both time and money when used effectively by your team while outdated applications may slow them down significantly and cause costly outages.
Insurers need to create an omnichannel customer experience that meets customers on mobile devices while keeping them informed about important updates, in order to build and sustain customer loyalty. Customers today are highly customization driven and quickly abandon businesses that fail to meet their needs; insurers that deliver tailored customer experiences will remain more cost competitive during a Covid-19 pandemic outbreak.
Conclusion
Insurance has long been part of our culture since humans first evolved. From hunting elk together in order to share the risk of getting gored by one, to shipping cargo in multiple caravans to avoid marauding tribes stealing everything, the idea of sharing and shifting risks has long been part of human civilization.
Modern times have given birth to new types of insurance that meet the changing demands of life:
U.S. P&C industry homeowners lines have seen financial difficulties recently due to an accumulation of moderate losses that has altered traditional P&C economic models and caused disruptions. Therefore, insurers must adapt how they do business to deal with this new set of challenges.
