As the curtain closes on 2022, it’s time for insurance industry professionals to reflect on what worked and didn’t work. Business would have been so much easier if only you had a crystal ball at the start of the year to tell you what to expect. Well, consider this article your magic maker for next year. Keep an eye on the following five trends in the insurance industry for 2023 that should emerge as part of the total market outlook
1. Technology Improves the Bottom Line for Everybody
Today, more than 80 percent of the premiums collected are lost to distribution costs. Increased efficiencies that include technology-based solutions in the office and those related to the customer experience will improve the bottom line for the vast majority of customers, agents, and entire companies.
If you’re looking for an overarching insurance market trend in the upcoming year, the increased presence of technology is it. For example, Artificial Intelligence (AI), bots, and other forms of digital enhancement will help companies to calculate more accurate assessments. The benefit will be passed down to any consumer who feels they are being unjustly penalized with higher premiums due to other riskier clients.
Another benefit of enhanced technology is a more expedient claims process. When an auto policyholder is involved in an accident that incurs repair costs amounting to thousands of dollars, they don’t want to wait six weeks for payment. The ability for automation to send an adjuster out, get an estimate, work with a repair shop, and get clients on the road again more quickly than before pleases both the customer and you, the professional.
2. Personalized Policies Replace Generic Coverage
The days of one-size-fits-all have come to an end in most of the business world. Consumers want to use products and services that feel customized. Nobody wants to feel like they’re just another number. Whether people are shopping for hair care products or automobile coverage, they’ll continue to do business with companies that demonstrate an understanding of their unique wants and needs.
Personalization of policies has been well underway for some time now, but one of the biggest insurance industry trends for 2023 is an expectation for that to surge even further. In fact, one of the newest insurance insights is that microinsurance is gaining traction.
In case you’re unfamiliar with the term, microinsurance protects against specific events. For instance, a farmer wants to take out a policy on their livestock. Someone doing business in an area that’s particularly susceptible to severe weather could consider coverage against natural disasters.
The increased popularity of microinsurance could easily be a product of an unforeseen circumstance like COVID. Most businesses did not see the pandemic as being the source of their destruction. Wise business owners of today have taken note and likely want to prevent against other unforeseen catastrophic events.
3. Value-Driven Services Drive Customer Satisfaction
In yet another way, technology will play a hand in helping insurers to create a better customer experience. Through the use of deeper analytics, companies will gain a more complete knowledge base for customer behaviors. This will allow for more accurate risk assessments and the previously mentioned personalized premiums, as well as a reduction in false claims.
With today’s economy being as volatile as it is, consumers are looking for value. They know they’re going to pay more for products and services as inflation tries to stabilize in 2023. In return, they’re hoping to receive value in a way they haven’t seen before.
Insurers who can implement best practices in technology and deep analytics to provide value-driven services like 24/7 customer service, healthy habits among health insurance clients, safe-driving benefits, and more will increase the odds of developing customer loyalty and long-term sustainability.
4. Is Blockchain a Viable Business Model?
Although the recent crash of the FTX crypto market has people questioning the validity of digital currency, this should not be confused as a direct reflection of blockchain technology as a viable business model.
With data security still a lingering issue for the global marketplace, blockchain offers a way to store, process, and transfer massive amounts of data from the customers to organizations, and from business to business in a secure manner.
Blockchain has several uses in a still-growing marketplace. The insurance industry size is expected to approach $1.4 billion in the U.S. by the end of 2023. Emerging technology like Blockchain can help with fraud protection, title tracking for autos and homes, and automated underwriting processes.
Recently, as many as 38 companies had plans to institute some sort of Blockchain model in their businesses. The question is, will you, as an entrepreneur, assume the relatively obscure risk of investing in this technology with the possibility of being seen as an early pioneer? Or, should you let it play out a little longer?
5. The “Hard “Market Will Continue
High among the list of influential factors for 2023 for insurance brokers to look out for is a continuing hard market. In case you’re unfamiliar, insurance market trends last somewhere between two and ten years. We’ve been in what is typically defined as hard conditions for many months now and this is expected to continue next year, as well.
A “soft” market is when availability and affordability are easy for consumers to secure. It’s categorized as being favorable to buyers. Conversely, a “hard” market means those things are a little more difficult for consumers to get and is therefore considered more favorable to providers.
The continuing hard conditions is usually a direct result of increased claims, triggering companies to raise rates and be selective about who they choose to insure.
Is There an Insurance Franchise Poised to Excel in 2023?
Whether you’re a savvy salesperson with 20 years of experience or an insurance newbie, Freeway Franchise has plenty of opportunities for you to join their team in 2023. If you’re interested in buying into our proven track record of success, call us today at (877) 822-3024 or fill out or online form. We have all the resources you need to make the upcoming year one that stirs up your entrepreneurial spirit.