There was an internet-wide joke throughout 2020 suggesting that 2020 was the worst year so far and that with 2021, things will start getting better. From COVID-19 to the increased number of natural disasters, everything disrupted our home and work alike. Insurers are no exception.
At the start of 2020, the World Bank released an analysis suggesting that during the year, global premiums would be at an all-time high, surpassing the $5 trillion mark. However, COVID-19 had different plans and very long lasting impacts on the insurance sector.
Based on the impacts of 2020 and the few days of 2021 that have gone by, this is what we believe we can expect to see through 2021.
2020 Predictions for the Insurance Sector
Risk Will Be Redefined & New Products/Pricing May Be Introduced
Even the most reliable risk models went belly-up in 2020. While the wildfires, hurricanes, and other climate change disasters were still manageable (to some extent), the pandemic and protest marches meant uncertainty about insurance.
At the same time, we also saw a rather drastic increase in the number of ransomware attacks, causing businesses to further suffer in these trying times.
This meant that claims-as-usual was no longer a reliable model. In 2021, insurance companies (including legacy planning agents) are going to gear themselves toward financial resilience, and one great way of doing that is by creating extensive capital reserves.
Overall, we can expect to see a huge increase in the capacity of insurance offered, plans, products, and even pricing.
Going Digital – Completing the 2020 Push
2020 pushed every business to go online, and as we watch another wave of COVID-19 (B117 mutation strain) spread like wildfire, insurers will move toward finalizing their digital ventures. Almost every insurer that hadn’t taken digital expansion seriously at first will have to, this time around.
These digital networks also need to be made secure due to the increased threats out there. 2021 will see a much more holistic implementation of these security systems and innovation.
The Focus on Inclusion, Diversity & Tolerance
As much as the insurance industry strived to remain neutral, there were several high-profile deaths in 2020 that lit the fire of diversity, inclusion, and tolerance with a passion even in this industry. They sparked not only nation-wide protests but instead, spanned across the whole world.
In 2021, the sector is expected to show progress in this regard. The insurance industry is known to be on the customers’ side whenever anything bad happens and this time, they are going to be on the side of inclusion to better reflect their customer base.
These practices are being implemented currently as well, but to a limited extent.
Broader Yet Targeted Solutions
With so much going on, insurers are bound to want to reinvent their products, services, and rates. This time around, insurers understand that their plans need to include a wellness element into the mix; especially when targeting millennials.
The 2020s (2020-2030) mean that people born in the 90s are now 30 and so, are bound to become the next target market for almost every sector; insurance included, and the industry must reflect that.
Despite the difficult year we all faced, the world continues spinning and all we, the insurance sector, can do is work hard and do our best in the face of adversity and challenges.