The insurance industry is quickly moving into a digital-first future where emerging technologies will reshape the way policies are sold, claims are processed, and risks are managed, and where market leaders are automating critical workflows to deliver seamless experiences, enhance customer satisfaction, and unlock profitability.
The insurance industry was once deemed reluctant to change due to its outdated, heavily regulated system. However,the expectations for insurance software have changed. We are witnessing a digital transformation in the industry. Insurance companies now improve customer experience and stay competitive through top-notch insurance software quality. The adoption of these new tech brings in the need for rigorous insurance application testing.
Insurers have been slammed by inflation, with loss costs surging by $30 billion in 2021 alone. Almost every line of insurance has been hit with rising claims expenses, while replacement costs have risen by 16.3%—nearly twice the consumer price index rise. To combat inflation, insurers need to find better ways to increase efficiency and reduce claims leakage. In addition to economic pressures, insurers are also facing rising customer expectations for a faster and more transparent claims process.
As technology continues to advance, the insurance industry is seeing a shift toward automated underwriting approval processes. This trend has been gaining momentum over the past few years and is expected to grow as insurers seek to streamline their operations and reduce costs without losing the human touch.
With record-high inflation, climate change, and an economic downturn on the horizon, the insurance industry is in a pressure cooker of unpredictable change. Sometimes this change happens over time. Sometimes it seems to happen all at once. To come out on top, insurance companies need new workflow and operations strategies that leverage process automation to streamline processes, reduce errors, and improve the customer experience.
Leading insurers are prioritizing claims process automation. Why? Because expenses related to preparing, processing, paying, and adjusting claims represent the most significant share of an insurer's operating costs. Even more than that, 87% of policyholders say the claims experience directly impacts their decision to stay with an insurance provider. But for many insurers, complex workflows, siloed data, and disparate systems have turned the claims process into a painful customer experience.
With skyrocketing inflation and growing severity of weather-related losses, 2022 was a tough year for insurers. We were spot-on with our 2022 predictions—such as the need to improve the customer experience, increased adoption of connected underwriting, and the growing importance of ESG. While many of last year’s trends will continue into 2023, we have identified several emerging trends for this year.
The underwriting process is notoriously inefficient. Today, underwriters typically spend 40% of their time on non-core activities such as gathering and entering data for submissions and renewals, issuing policies, and administrative tasks. The result of such manual underwriting is lost productivity and higher costs, with an expected price tag for insurers of $85–$160 billion in lost business over the next five years. In the current economic climate, efficiency is more important than ever.
When a leading office supply chain coined the phrase “That was easy!” in an iconic 10-year-long ad campaign, that simple idea resonated with people everywhere. And that’s no coincidence. None of us wants our daily tasks to be labor-intensive, time-consuming, or complicated. The same is true in the world of insurance. To drive growth, insurers need to make it easy for agents and brokers.
