Do insurers dream of electric sheep?

New products, technologies, regulations and trends, we reveal it all!

As the end of the first quarter of 2020 gets closer, we summarized several trends reports (Deloitte & Capgemini) for you.

Nowadays most insurers are trying to maximize their cost management, making it more cost-effective and seeking to vary it through external providers, including service providers. Carriers are also looking to strengthen their core operating systems by improving the customer experience and developing new services, often using new technologies. They keep investing but are gradually shifting from an investment strategy aimed at supporting “business as usual” to one that allows them to finance innovations to disrupt their own business model. For 2020 and 2021, insurers need to be at the forefront of innovation, rather than following the trend.


What are the next challenges for the insurance industry?



Let’s dive into it:

Life insurance

In developed countries, young workers are not attracted to life insurance products, especially in light of the current interest rates. Investing in cryptocurrency, real estate or in their best friend’s start-up is far more attractive. In developing countries, the classical life insurance model lacks flexibility and more and more alternatives are developed (microinsurance, tontine, collaborative insurance or transfer apps such as PayTop or WorldRemit in African countries). Classical carriers have to reinvent their business model. They should tackle the following challenges:

  • Improve the brand image of life products (specifically in this low interest rates environment)
  • Attract new customers, as the penetration rate of life insurance worldwide remains low:
    • By offering more flexible products, especially for emerging markets
    • By offering more customized products allowing finer underwriting
  • Better use of the data and finer data analyses to anticipate customers’ needs both before and after the underwriting.
  • Simplify offers and find a new marketing strategy for the pension products.
  • Improve the sales process and the customer experience by simplifying it and making it shorter and more transparent.
  • Improve and induce the well-being and health of the policyholders, like Jonh Hancock, as we discussed in our article on ethics.


Non-life insurance

As we mentioned in our article of November 2019, the P&C market is getting harder. The critical issues for non-life insurers for the years to come are as follows:

  • Adapt their risk assessment models to better tackle the growing number of natural catastrophes, in particular by developing models based on Machine Learning.
  • Develop direct distribution channels that are accessible to all types of businesses, especially very small businesses and e-businesses.
  • Reassure consumers who are increasingly aware and educated, on the use of their private data.
  • Develop new solutions for the growing circular economy.
  • Develop new partnerships with non-traditional insurers (Ikea, Tesla, Porsche,…) and insurtechs and continue to invest in them.


Cloud Computing

More and more carriers are turning to cloud computing and this trend is just starting. However, the use of cloud is shifting from a simple infrastructure to a true strategic transformation tool, implying a business methodology to be developed and implemented. Cloud computing will also bring more flexibility and computational power to methodologies such as Machine Learning.



Although technological (r)evolutions are trendy, insurance remains a human business, and the human factor is not going away anytime soon. The technological advances should be supporting that, and not replacing it. The real challenge for insurers will be to combine technological innovations with the regulation evolutions while proposing transparent and flexible innovative product to their customers. Insurers have enough on their plate to keep them busy for the next 10 years or so.


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