How Digital Channels Will Change the Insurance Industry in 2021

It is safe to say that almost everyone experienced an unprecedented level of stress in 2020. No country, government, no business, no individual has remained untouched by the effects of the virus. Across economic sectors, companies have responded in a variety of ways: some — by cutting costs, some — by increasing investment, and some — through innovation. We surveyed our thought leaders, domain experts, and key practice stakeholders about the immediate and long‐term consequences of the virus felt in select industries and sectors.  

If you want to learn more about the emerging technology trends across industries such as Healthcare, Media & Entertainment, Retail, and others, read our latest whitepaper: https://bit.ly/2WAXFzb  

In this article, we’ll take a closer look at the emerging trends within the Insurance Industry in 2021.  

Consumers will increase digital interaction with insurance companies 

The coming 2021 year will likely see unprecedented investment in the Insurance industry. Insurers of all sizes will emphasize cost optimization, which will add momentum for insurtech startups since these companies leverage technology. According to the report by CB Insights, insurtech funding increased by 52% from the second to the third quarter in 2020. This trend should continue in 2021 as there is a significant demand for digital insurance services from both businesses and consumers. According to a recent report from the Association for Cooperative Operations Research and Development (ACORD), a non-profit organization in the Insurance Industry, the percentage of consumers interacting with their insurers via digital channels has doubled globally since 2015. 

Big data and artificial intelligence will play a greater role, and many insurers will migrate to the cloud 

It is not only customer-facing services that need a revamp. Internal process optimization can help save costs, too. According to a report by Novarica, a consultant to the Insurance industry, “… between 15-25% of insurers, depending on the segment, are increasing investments in big data technology, AI, machine learning, unstructured text analytics, sensors, and drones.” Many companies are choosing to migrate to the cloud, and this trend will continue as the cloud offers access to the latest technology at a lower cost. 

In 2021, we will see more and more digitized underwriting, policy administration, and claims processing. The U.S. Claims Digital Experience Study by J.D. Powers states that P&C insurance policyholders' use of digital channels in claims has increased by 18% over the past three years, and this is likely to continue to rise. 

DataArt designs and builds custom software solutions that are tailor-made for the insurance industry. We have deep domain expertise with insurance policy and claims management systems, smart ledger platforms, fraud detection, risk prevention, underwriting, claims processing, cloud migration, and data warehousing/analytics. If you are looking for technological help in your Insurance business, contact DataArt.