7 insurance industry predictions & trends for 2023

As we turn the page on 2022 and look ahead to the new year, it's important to consider the trends and predictions that will keep shaping our world in 2023. From advancements in technology, to macro-economics to the consolidation of existing trends, the coming year promises, to bring a host of exciting changes. So here are some key developments that I may consider will shape the insurance & technology sector during 2023:

1.??????More Consolidation, More M&A ?and raise of “frenemies collaboration:?The insurance sector is likely to see a trend towards consolidation in the coming years, as we’ve seen already cases in 2022. This may involve mergers and acquisitions, as well as partnerships and strategic alliances. The process of raising capital has become more complicated to highest rates, according to many economists, recension may happen during next year, and if you see the insurance value chain, there are less “white spaces”; so also we’ll see more and more collaboration, consolidation and M&A. Specially legacy incumbents without developed digital capabilities purchasing tech or Insurtech. ?Also we’ll start to see more collaboration between companies that maybe traditionally can considers rivals, “frenemies" collaboration: It is the moment to see the market and sectors different, these types of partnerships can be beneficial for both parties, as they allow companies to leverage each other's expertise and resources to achieve a common goal. However, they can also be complex and require forward thinking, careful management, as the companies involved must balance their competitive interests with the need to cooperate and achieve their shared objectives.

2.??????Embedded insurance & non-traditional distribution becomes the “new normal” for Digital Channels. ?Early adopters’ platforms that integrated insurance into their value proposition are now reaping rewards, not just in terms of revenue, but also because it has been demonstrated to have increased NPS and set them apart from competitors. Consumers love it. ?As a result, I anticipate that in more challenging market conditions (companies focus in profitability) , players who started their journey in recent months will intensify their efforts, and new platforms and companies will join them , to enhancing?their value proposition with insurance and get additional revenue. ?Early adopters in South East Asia and Latin America will mature, and North Asia, Europe and the US particularly jump into the band wagon during this year. A serious platform that includes insurance in its value proposition will seek out reliable insurance partners with deep insurance expertise, financial strength, international presence, product innovation, technology, and best-in-class claims capability. The ones who will offer the best and more robust value proposition will be the winners. ?

3.??????The technological & UX divide between advanced digital Insurance incumbent and Insurtech disappear.??As Technology is been democratize, there is not a significant competitive advantage just levering technology, it is what Insurance companies do beyond technology what will make the difference; what’s the product innovation, what’s the cultural agility, what’s the value proposition, how you simplify the work and add value to partners, etc.. For doing that, it doesn’t matter if you are a just born company or stabilized one. In 2023, if you want to run business digitally, you need to have a strong technology (period). So, we’ll see the ones who did the right things, incumbents and Insurtech, playing into the same space, with no significant difference in technology. ?Think about established companies like Microsoft or Apple, which were founded 32 and close to 50 years ago respectively. The insurance industry shouldn't be any different.

4.??????Greater focus in Customer experience, Product Innovation and Omnichannel experiences. : Insurers will place a greater emphasis on enhancing the customer experience, as consumers become more savvy and demanding. This could include the use of omninchanel experiences, combining off-line and on-line experience, depending of the complexity of the product, the customers segment and the moment of the journey.?Digital tools to make it easier for customers to interact with their insurer, as well as the development of more personalized and convenient insurance products. It not digital vs. non digital, it is not a sum zero game, it is about develop awesome customer experiences and add value in the moment of true.

5.??????Artificial Intelligence ; The “big thing” in Tech for 2023 (ChatGPT): Thanks to the investment in AI and machine learning technologies will become we will see cases around AI become increasingly prevalent in the insurance industry as well. AI is enabling insurers to process and analyze large amounts of data more efficiently and accurately.?Also to use to reduce internal process thanks to automation what will impact possibility in the bottom line and better customer experience.?This could lead to the development of more personalized and targeted insurance products at scale, as well as more efficient claims processing and fraud detection. Special mention to ChatGPT a cutting-edge natural language processing model, is set to revolutionize and even disrupt many sectors . Just released few weeks ago, it has the ability to understand and respond to complex questions, ChatGPT will automate customer service and claims processing, 24/7 coverage, it will also enhance the customer experience. It can even play a role in contract and policy wording. Stay ahead of the game by familiarizing yourself with this powerful technology, and its potential to transform the many sectors in the coming years, for me personally the big force arising for 2023 and if the deal with Microsoft move forward , a real threat to the dominance of Google Search.

6.??????Continue the adoption of Telematics, levering connected devices & Wellness: ?With 15 billion devices connected worldwide, Telematics, which involve the use of sensors and other technologies to gather data about a vehicle's performance and behavior, are expected to become more widespread in the insurance industry, we are just in the very early stages.. In addition, the use of connected devices, due to smartwatches and sensor / tracker will also continue to grow , there are interesting programs associated to wellness specially in Asia, as they provide insurers with a wealth of data that can be used to better understand customer and move to much more engaging value proposition, like promotions, give back programs and added value services that increases engagement and potentially change behaviors going beyond the stands insurance value proposition. ??

7.??????Less hype on Web3 anf blockchain; but will see uses emerging : The hype on Web3 and blockchain will be less than previous years due to what's happening across the sector with cases like FTX, so regulation will jump in, investors will be more skeptical, and maybe we'll see some more movements that will shake the Web3 ecosystem, but the use of blockchain technology, which enables the secure and transparent transfer of data and assets, is here to stay. This could lead to more efficient and secure claims processing, as well as the development of new insurance products such as parametric policies that pay out based on predetermined triggers and smart contracts.

Overall, it is an exciting time to work in the insurance sector, helping others in their thought time, protecting millions of people with greater financial inclusion, and in general creating better experiences along the way to make the journey less frictionless, more friendly, and more relevant.?The insurance industry will continue to evolve and adopt new technologies in the coming years, leading to more personalized, convenient, and efficient insurance products and services for consumers worldwide. Now it is time to work as Einstein said, “The best way to predict the future is to create it”. All the best for 2023.

Text enhances with AI – “Quillbot”and “ChatGPT”