As we enter 2024, Insurtech is going through exciting changes. Technology is taking center stage, bringing new opportunities and challenges. 2024 brings exciting advancements, where new technologies like artificial intelligence (AI), embedded solutions, and stronger cybersecurity take the spotlight.
In this article, we will explore the new trends of 2024 and dive into how they are shaping the landscape of the Insurtech industry. 🔍
In today's world, we're using a lot of artificial intelligence in our daily lives, and every industry is trying to catch up with this tech trend. As we enter a new year, the impact of AI on business continues to grow. The reason AI works so well is that we create a ton of data every day, and that helps AI learn and get better.
As technology keeps getting better and more digital, it's changing how businesses operate. Customer-focused innovation, personalization, and data sharing are powerful concepts that play a critical role in shaping the future of customer protection.
As with many other industries, AI is bringing significant changes to the Insurance world. The Insurtech industry is a front-runner in making these changes. AI can improve the speed and efficiency of insurance processes, which benefits both providers and customers. The insurtech industry recognizes the potential of AI to boost operational efficiency, create innovation opportunities, and deepen customer relationships.
Looking forward to 2024, it's expected that AI will step up its game in giving insurers more sophisticated advice on how to get ready and protect against unpredictable situations, like extreme weather or sudden policy changes. Also, it will offer personalized and proactive suggestions in the insurance world, helping insurers prepare better for potential risks.
It's almost certain that this year, the first place where customers will see generative AI solutions is in customer service. They will encounter smarter chat features. AI will help policyholders navigate complex insurance terms and conditions and provide customers with immediate answers to customer complaints.
The insurance product development process and distribution channels have changed significantly in the insurance market in recent years. In the past period, the pressure to innovate has led insurers to move ever closer to start-ups. Collaborations have been established, start-ups have provided new products, new customer services, and new back-office functions for insurers but these have mostly covered parts of the overall process. On the other hand, insurers tended to take the successful startups that were creating new insurance solutions and acquire them and integrate them into their ecosystem.
This year, we believe that there will be a growing drive among insurers to become more of an insurance platform. They do not need to manage the whole process, but rather to provide their years of experience to new players. Such an exercise could open up the possibility for insurtech start-ups to provide new solutions directly to customers much more easily.
It's a win-win-win situation. Insurers don't have to worry that if they innovate in one process, the rest of the whole system doesn't fit properly. They don't need to delegate huge resources to see through the technologies, they just need to share their insurance market experience. And it will be much easier for startups to overcome regulatory hurdles and the difficult integration of robust insurance systems. And of course, the biggest winners will be the users, who will get fresh insurance services faster and at better prices. Sounds good, right?
This trend has been going on for years. But we think it will reach new levels this year. It's important to underline that embedded insurance is the future of the insurance industry, customers don't want slow and complicated contracting, they want simple plug-and-play solutions or in this case, we can call it “click and care”.
And that's what embedded insurance provides solutions for, where the customer can simply add their insurance to an online service or product, with no need to enter any additional personal data or start a new contract and payment process. Moreover, with such solutions, more personalized offers can be made. For example, let's say you order a professional ski online and you get or are offered extreme sports insurance. Or let's say you buy a flight ticket with your credit card and the card issuer immediately adds trip cancellation insurance. How much more comfortable would that be? We are sure that this year such solutions will be more widespread and we will even see new approaches combining the digital and physical worlds.
As technology advances, the potential for cyber threats grows, necessitating a more robust cybersecurity framework within the insurtech sector. The industry is expected to prioritize cybersecurity measures to safeguard sensitive information, ensuring a secure environment for insurers, customers, brokers, and third-party administrators. This heightened focus aims not only to fortify data protection but also to enhance overall industry reputation and trust, promising a safer and more resilient insurtech landscape.
Insurers, customers, brokers, and third-party administrators are all part of the interconnected web of the insurtech environment, making it crucial to establish a secure digital space for everyone involved. The emphasis on cybersecurity goes beyond data protection; it's a strategic move to build trust and enhance the overall reputation of the insurtech industry. By prioritizing cybersecurity, insurtech companies aim to create a safer and more reliable landscape that instills confidence in all stakeholders and ensures the sector's continued growth in the face of evolving technological challenges.
In addition to these, it is important to have cyber insurance as a means of protection. It guards against cyber risks, ensuring financial security for damages and legal responsibilities from events like data breaches. This coverage provides peace of mind, navigating legal complexities, and showing a commitment to cybersecurity. As the number of cyber-attacks keeps rising, and people become more aware of the risks involved, the cyber insurance market is expected to grow significantly, reaching over USD 79.75 billion by 2030. From 2024 to 2030, every year is predicted to see an increase in the demand for cyber insurance as businesses and individuals seek protection against the escalating threats in the digital realm.
Psst, we want you to know that we believe in these predictions so much that we are actively involved in these solutions.
If you'd like to talk about it or are curious about what we're up to, get in touch. 🚀