Your guide to confidently navigating coverage when the insurance industry shifts direction.

The insurance sector is complex, with many contributing factors influencing each other and, in turn, influence you. Some knowledge of these dynamics provides valuable insights for policyholders and help them feel comfortable with their coverage. Let’s look at impactful trends and how you can prepare and adapt effectively.

Key Takeaways:

  • Discover how the insurance industry adapts to meet changing consumer needs and market trends
  • Learn about innovations and advancements that shape the future of insurance
  • Gain actionable tips to leverage emerging insurance trends

What consumers want now

Technology is today’s prime change agent. It’s altering how people live and work, and what they expect from the insurance that impacts their lives. Customers want digital insurance tools to be faster and more accurate. They want custom policies that reflect their needs now and in the future.

Insurers respond to these needs in contradictory ways. For some issues, new, more flexible, customer-friendly policies are provided for customers. Other solutions place the onus on policyholders becoming more self-sufficient.

The gig economy is one big driver, shifting customer expectations and industry adaptation (more on that below), as are Mother Nature and rapidly expanding cybercrime. Let’s look at the major factors behind changes that individuals and businesses demand – and those being forced upon them.

Tech innovations in insurance

The two most influential technologies are artificial intelligence (AI) and the Internet of Things (IoT). Here’s a summary of how they’re both making insurance smarter and more user-friendly.

AI’s rapid information processing expedites insurance underwriting, boosting accuracy and consistent pricing. AI spot customer data errors that a human underwriter may miss, avoiding costly errors and unnecessary overpayments. AI’s powerful analytics ensure customers no longer need to wait for humans to laboriously review applications; it’s now possible to compare multiple quotes online in minutes.

The IoT is a Wi-Fi-connected web of smart devices encompassing home security cameras, dashboard monitors, wearable fitness/medical equipment, and more. IoT data enables insurers to make precise, dynamic risk assessments thanks to constantly updated policyholder data.

This also means faster, more efficient claims processing and more accurate customer information with the further benefits of well-tailored, affordable policies. Pay-as-you-go (PAYG) coverage is one example of customers paying based on how often they use an insured item. Thus, a more frequent driver would pay more for auto insurance than an occasional motorist.

Those two trends represent ideal outcomes in 21st-century insurance changes. Our next group of changes are based on modern problems requiring informed policyholders actively manage their policies. 

New trends influencing insurance 

Three of today’s most prominent insurance disruptors are:

– Climate change

Increased flooding, wildfires, hurricanes, and tornadoes have increased due to climate change and wreak mass havoc. It forces insurers to regularly pay out huge sums for massive customer losses, which drive up the cost of premiums or makes some insurance types impossible to obtain in high-risk areas.

– The gig economy

The number of part-time, freelance, or under short-term contract workers continues to rise. This alters the definition of work, forcing insurers to offer policies that better reflect and serve today’s diverse, often temporary employment roles.

– Cybercrime

The severity of this threat grows every year, with 2024 projected to cost over $9T in losses. Businesses (especially small ones) risk facing huge financial losses or even closure due to cyberattacks. 

How can affected groups adapt? Gig workers can seek more flexible, short-term policies which might accommodate their needs, such as PAYG-type coverage. Speaking to experienced insurance advisors can help find the right policies and explain how gig work can create financial vulnerability.

For example, gig workers might consider more traditional coverage like life or disability insurance. Both could help provide financially for them or their loved ones if they should pass away without fixed employment benefits, or provide income if unable to work due to poor health.

Homeowners and renters must proactively adapt to climate change. Researching NFIP flood insurance and FAIR Plans is a good start, as is keeping your home in well-maintained condition, placing flood barriers and sealing windows and doors. All these help protect your property from climate-based natural disasters and potentially lower your premiums by lessening liability.

Having cybercrime insurance is now essential for most businesses. This constantly evolving threat is forcing every organization to face the possibility of severe system liabilities for companies and their  customers. Companies can adapt by scheduling a free exposure assessment of their current cyber-insurance coverage, and then selecting the right policy.

How to navigate insurance changes

Learning about trends and new developments can empower you with knowledge and help you embrace changes. Combining this with expert insurance advice positions you well, no matter the markets’ moves.

Online resources like the NICRIS insurance knowledge base keep you connected to emerging trends and big issues, while the industry favorite Insurance Journal offers a free email newsletter that covers many topics related to the sector.

It’s hard to overstress how staying informed helps you make better insurance decisions. A few minutes of occasional reading or a consultation with your insurance advisor could make a positive difference.

Moving forward confidently

Changes in the insurance sector are inevitable, but being helpless isn’t. NICRIS Insurance can make coverage easier to navigate for you and your loved ones, helping you find cost-effective and comprehensive policies that protect your future.

We can provide an instant quote on car, motorcycle, home, renters’, and term life policies. You can also discover more about the NICRIS team and send us a message with any questions.