Insurers faced considerable headwinds in 2021. Persistently low interest rates limited demand for some insurance products. Furthermore, extreme weather has wreaked havoc across the globe; disasters are becoming more intense, more frequent, and more costly in an urbanizing world. But conditions aren’t all bad. New data combined with analytics gives insurers new information. Insurers, in our view, won’t shy away from taking some, albeit calculated, risks. In 2022, insurers will rely closely on new data sources to find hidden profits in challenging areas.
Climate change isn’t the only challenge insurers must contend with next year. Alternative providers see big opportunities in simplifying the customer’s insurance buying journey. Ecosystem orchestrators, like Volvo, aim to reduce frictions around the buying experience. Insurers have taken notice, and we see them exploring new markets for their products and services through embedded solutions. They will get serious about identifying suitable markets and evaluating product relevance.
Though embedded solutions will help insurers improve their products and services, our surveys reveal that improving the customer experience (CX) is the most important priority for insurers. We believe that digital insurance platforms can help insurers bring new products and services to the market faster, which will help move the CX needle. We believe 2022 will be a very strong year for digital insurance platform investment.
Driving revenue growth is an enduring priority for insurers. But they won’t be the only ones looking for revenues. Cyber criminals seek opportunities, too. With ransomware attacks on the rise, the cyber insurance marketplace has already taken a hit. Next year, we expect that at least one major insurer will stop writing new cyber business.
We are slowly returning to (some semblance of) normal, and insurers continue to invest in digital capabilities to provide some of the services customers expect. But there is still much work to be done across the customer lifecycle and insurance value chain. We believe that insurers are primed to accelerate their businesses and digital transformation in 2022.