From on-demand insurance to InsurTech

Global Insurance Trends

The international insurance industry is changing, characterized by technological innovations, changing customer needs and new regulatory requirements. These trends and developments simultaneously offer opportunities and challenges for insurers worldwide.

Digitization and technological innovations

Artificial intelligence (AI), big data and the Internet of Things (IoT) enable insurers to automate processes, better assess risks and offer personalized services.

  • AI and automation: AI-based systems are widely used for claims settlement, which can reduce processing time from weeks to hours. Chatbots and virtual assistants also improve customer service.
  • IoT: Networked devices, such as smart home sensors or wearables, provide valuable data that insurers can use to minimize risk and set premiums.
  • Blockchain: Blockchain technology is gaining traction to make transactions more secure and transparent. Their potential is particularly evident in the field of reinsurance and smart contracts.

Changing customer needs

Customers’ expectations of insurance companies have changed significantly in recent years.

  • Individualization: Customers want flexible and personalized solutions. This is why on-demand insurance, where policies are taken out at short notice and only for certain periods of time, is becoming increasingly popular.
  • Transparency: The demand for clear and simple contract terms is increasing. Customers prefer providers who communicate transparently and avoid hidden costs.
  • Sustainability: Many customers value environmentally friendly and socially responsible insurance solutions. Sustainability is therefore becoming a competitive advantage.

New competitors and InsurTechs

InsurTech startups have shaken up the industry by offering innovative solutions and challenging traditional business models. These companies use modern technologies to provide cost-effective and user-friendly insurance services.

  • Collaboration instead of competition: More and more traditional insurers are partnering with InsurTechs to integrate their technologies and bring innovative products to market faster.
  • Direct insurance: InsurTechs such as Lemonade or Wefox offer insurance directly via digital platforms, bypassing the classic sales channel via brokers or agents.

Regulatory challenges

Stricter regulations and new regulations are forcing insurers to adapt their business strategies.

 

  • Data protection: With laws like GDPR in Europe, companies need to ensure that customer data is handled and protected with care.
  • Climate risks: Regulators are increasingly requiring insurers to integrate and report on climate risks in their risk assessments.
  • Capital requirements: New capital requirements, especially in the area of solvency, pose major challenges for smaller insurers.