The global insurance sector is poised to grow steadily, with optimism, induced largely due to rapid vaccination and fiscal stimulations of the national governments. Despite a 2.9 % drop in growth in 2020, the global insurance premium will register 3.4% real-time growth in 2021, which is expected to decline to 3.3% in 2022, and 3.1% in 2023 amidst supply chain, human resources, and enhanced fuel prices challenges. The life premiums will grow by 3.5% in 2021 and 2.8% in 2022 and 23. The non-life premiums will be growing by 3.3% in 2021 and 3.5% from 2022 to 2023. By mid-2022, the global insurance premiums will be exceeding to $7 trillion.
All the major research agencies of the globe however are unanimous on stating the below-mentioned factors as drivers of the future of the global insurance industry
The insurance sector is data-centric and collecting customer information is crucial for signing life and non-life insurance policies, sustainable maintenance of such policies, including recovery, and refunds in the wake of damages. Insurance industries have been banking on traditional means of collecting data by physically reaching out to customers with information, which is time-consuming. Customers that have already tasted the efficiency of the retail CPG markets are expecting health, banking, and the insurance industries also to reach out to them quickly with niche and highly customized services to meet their specific requirements.
Be it individual homes or manufacturing industries, and agricultural farmhouses have started embracing surveillance cameras, AI-embedded analytical tools, and AR/VR technologies to scan and collect data, even from a remote and minute corner of the area undercover. In case of any accident and recurring damage to life and property, customers have full-proof evidence of the incident. If the insurance agencies lack such efficiency and technical know-how, they suffer from a delay in addressing the issue and redundancy of men, material, and machinery at their disposal. Increased use of machine learning tools and AI-embedded analytics are here to collect data and to measure metrics accurately on a wide range of devices and appliances, including but not limited to cars, fitness trackers, home assistants, smartphones, and smartwatches. Their application is expected to grow further in areas like clothing, shoes, eyewear, and medical devices. By 2025, the smart technology market is expected to fetch one trillion US dollars from connected devices.
Like any other industry in the current marketplace, the insurance industry had to adapt to regulatory compliances that emphasize greater consumer and security for data collection. All the major North American states have started enacting laws to ensure customer privacy to avoid data mismanagement of big tech companies. Insurance companies must equally abide by GDPR, CCPA, and CPRA Data Privacy compliance norms of Software to protect the privileges of the consumers. Insurance companies are expected to keep environmental, social, governance, and climate risk norms while framing policies.
Although there are early adopters to digitalization in the insurance sector, they are legacy software and hardware infrastructure to ensure day-to-day operations. The document management system is useful in transforming the paper-intensive insurance industry that is still relying greatly on the manual filling of details, collecting proofs, preserving and transferring them safely across the global destinations to honor claims. They are expected to rely on word processors and repositories to document and archive the data, prone to tampering and data theft.
Under ideal conditions, insurance companies will take at least 24 hours to address an insurance query, as they run to and forth the hierarchies and systems to provide an accurate and satisfactory answer. Thanks to DMS adoption, insurance companies are now able to address consumer issues in a few seconds.
Many startup insu-tech companies have emerged to provide comprehensive DMS in the insurance sector to leverage the growing demand to ensure speedy, yet safe customer services. Global insu-tech market revenue was valued at $5.48 billion in 2019 and it is expected to reach $10 billion to $14 billion by 2025, growing at a CAGR of 10.8% by 2025. Funding on Insurtechs in 2020 has seen a record $7.1 billion. The global IT spending on the insurance sector will grow by 5.2% in 2021 to reach $210 billion and it is expected to grow at a CAGR of 6.4% to $271 billion by 2025. Spending on IT services and software would particularly boost a CAGR of 7.9% and 11.2%, respectively.
Chief Information Officers (CIOs) play a key advisory role in suggesting the tight technologies to their CEOs that eye on multiplying their business through enhanced automation and digital capabilities to drive new revenue streams by market expansion and customized and more personalized services to consumers. According to a recent survey among CIOs, 58% of respondents were of the view that the pandemic is responsible for the spur in insu-tech digital spending, which is expected to grow further. Insurers will be spending heavily on blockchain technologies for customer data management, including effective customer identity management and verification to ensure safety. They will also rely on Zero-trust security and similar approaches to create resilient networks that protect against increased cyber threats.
E-signature as an integral part of the document management system offers trusted and tamper-proof services to the insurers to serve the insured effectively. Apart from simply focusing on the full-proof safety of data security and data transfer, it offers a wide range of services to streamline the entire document filing, registering, preservation, archiving, and delivering the customer’s personalized demands.
From minimizing costs and maximizing sales, insurance companies across the globe have started focusing on investing in green technologies to ensure efficiency, safety, and speedy customer services. Customer-friendly technologies play a central role and policies of inclusion, climate risk, and sustainability will remain central while adopting new technologies.
