With the conclusion of 2021 and the beginning of a new year approaching, we at Plug and Play, one of the world’s most active early-stage investors, have recognized the five most notable trends that affected the insurance business in the previous year, as well as what we can anticipate in 2022 and beyond.
Ability in Distribution Technology and APIs
Within the industry, you’ll have detected over and over “insurers are dying for distribution” which they’re searching for new alternative routes to plant their merchandise inside additional customer-facing channels. we are saying “relatively new” as a result of the distribution technical school trend has been around for several years; in Europe, particularly new MGAs who target specific business lines, with higher capabilities than what insurers have to be compelled to offer, are getting into the insurance market already for a few time. At an equivalent time, various distribution channels solutions, equivalent to ZenOwn have been approached by insurers to leverage their channel to sell insurance to finish customers.
Customer Feedback
The poor leverage of knowledge at scale could be a well-known drawback within the insurance industry. Incumbents are failing within the digitalization strategy as a result of they’re not able of investment the quantity of transactional data (structured and unstructured) that are recorded in their systems. info is usually hold on in numerous silos that don’t communicate and act with every other; this leads to inadequate data management that’s powerfully limiting the capabilities of AI solutions. the combination between an occasional client interaction, that reflects the character of the insurance business and a scarcity of ability to use the high amount of data collected over time, lead to a awfully restricted understanding of client wants (ex. Missing on cross-sell/upsell opportunities). Zelros, a portfolio startup of Plug and Play, for instance, helps insurers recuperate insights on customer needs and supply the simplest recommendation relating to policies’ content.
Environment
Indeed, insurers could be at the forefront of the climate revolution because of their position as risk carriers. Insurers, as market risk bearers, are compelled to contribute to the green transition the world is facing; One way to achieve this is to promote prevention activities and tools that can avoid or largely prevent disaster events and their natural consequences. Footprint measurement and reduction: Measure how many tons of carbon dioxide are emitted per year per company by making a score
based on three different areas. Scope 1 includes direct emissions from own or controlled sources. Scope 2 includes indirect emissions from the generation of electricity, steam, heating and cooling purchased and consumed by the reporting entity. Scope 3 includes all other indirect emissions that occur in a company’s value chain. ESG, Sustainable and Impact Investing: ESG is an assessment of a company’s collective awareness of social and environmental factors. Insurance companies that proactively addressed sustainability issues in the 2000s are now considered leaders, while companies that are only superficially involved will be forced to comply or face negative financial and branding consequences. Clarity AI has collaborated with Manaus (BNP’s technological subsidiary) to obtain information facilitating the creation of analysis and regulatory reports with information and sustainability services. Climate risk assessment: This implies, on the one hand, avoiding the economic costs and financial losses of the increasing severity and frequency of extreme events related to climate change; and on the other hand to avoid negative financial consequences, e.g.Grams. Lower economic activity, lower income, lower savings, and more stress on financial assets and markets. Insurers seek to achieve these outcomes by incorporating data on both acute climate impacts (floods, fires, heat, drought, cold, wind and hail) and chronic (rising temperatures, spread of tropical pests and diseases in temperate zones, and accelerated biodiversity loss). Physical climate risk in risk modelling.
Insurance for SME’s
SMEs make up the vast majority of businesses worldwide; For example, companies with fewer than 250 employees make up around 99% of all companies in the EU. In fact, your access to insurance is limited and your range of product options always seems limited. The current European SME insurance market is lengthy, non-transparent and offline. One of the SME insurance policies is definitely a cross-cutting issue that affects several sectors. By researching this trend with our partners, we have identified several areas where new offerings could potentially be developed in the SMB space: attracting new customers and de-risking existing and potential new policyholders. The areas we have analyzed together with our partners are the following: Creation of new insurance products Slice Labs Cybersecurity Kynd.io Employees Occupational Safety MakuSafe Precision Farming Xfarm, Agricolus Employee Benefits (Life and Health) Healthy Virtuoso, Yas. Life Pension (Pillar 2) Penfold Finally, we have identified three key areas that can be considered horizontal within insurance: B2B lead generation (marketing, content, website analytics) Glassbox, Captain Data Underwriting Analytics Wenalyze, Continuity Tech Gamification Lead Family.
Automation of the Back-End and Front-End
The COVID19 pandemic has had a major impact on the way organizations operate around the world, and insurers have certainly not been left out of these new trends. Enterprise technology is a key issue for operators who have faced a new phase of remote collaboration with their customers as well as with their intermediaries. We have seen a growing interest in different types of automation solutions ranging from backend automation to frontend automation. By backend automation we mean all solutions needed to implement smoother internal processes; Most often, this practice relates to automating repetitive tasks through the use of IPA or RPA solutions, freeing employees from some of their daily tasks. Startups like Hypatos or Automation Hero have been at the forefront of this automation revolution, enabling our partners to transition to a paperless work routine. When we talk about front-end automation, we mean all processes and actions required to simplify and digitize the customer experience and the work of agents and brokers. Flexperto, for example, has done a lot for our companies and helped them digitize their sales and services without losing personal contact with their customers. Such solutions pave the way for an omnichannel presence for insurers.
