The pace of innovation in the U.S. property/casualty industry will accelerate in 2017, as technology advances and the growth of InsurTech raise customer expectations for greater innovation and new business models, according to a new report by Ernst & Young.
In its 2017 U.S. Property/Casualty Insurance Outlook, EY says the industry is at an inflection point, as continued economic headwinds provide little support for insurers plagued by shrinking investment incomes, escalating claims costs and rising regulations.
A new Trump administration raises the prospect of further economic and regulatory change and with the P/C industry in flux, this is a good time for CEOs to think through their future business strategies, EY suggests.
As insurers look to adapt to disruptive market shifts, EY expects companies will do more to develop a culture of innovation in 2017:
“The Internet of Things, telematics, artificial intelligence, driverless cars and blockchain have the potential to transform industry fundamentals and even redefine the nature of risk. In the future, competing for market share will be increasingly dependent on technology, data and analytics.”
With more than 1,000 InsurTech startups in operation, the pace of P/C innovation will speed up next year.
For example, in 2017 InsurTech startup Trov plans to roll out on-demand insurance that will enable customers to use their smart phones to turn coverage for personal belongings on and off. Trov is an example of how product innovation directed towards millennials could disrupt the P/C insurance model, EY says.
Insurers will take digital transformation to the next level in 2017, expanding their use of robotics and advanced analytics across most aspects of their business, from claims handling and underwriting to customer relationship management (CRM) systems and risk management, according to EY’s outlook.
See our earlier blog post for latest data on the InsurTech sector.
Read about the top InsurTech deals of the year as reported by Insurance Networking News here.