Top 11 Trends Insurance Technology

The insurance industry is changing to “digital-first” business models that have the potential to create new value worth billions of pounds. For insurers to do well in their field and stay ahead of the competition, they need the right technology skills, such as machine learning, advanced analytics, blockchain, IoT, and cloud native. At the same time, they will have to compete with insurance technology companies (insurtechs) that focus on offering personalised products, prices, and coverage.

Today, the UK insurance market is the largest in Europe and the fourth largest in the world. London is a global centre for specialised insurance. In the last 10 years, the total value of gross insurance premiums underwritten by UK insurers and reinsurers was more than €400 billion, which was at its peak before the financial crisis. In the same way, developments in IoT and smart cars are expected to drive a lot of growth in areas like motor/car insurance.

Yet the UK insurance industry is struggling to adapt to all the changes. The market has been hit hard by COVID-19, mainly due to a spike in the required number of claims processed. This problem has been made worse by a decrease in the number of employees within major insurers. Companies are also expecting massive changes in the market and do not have fully fleshed-out strategies in place to deal with them. There will be a push for more pay-per-use insurance services that require a high level of digital sophistication — IoT (cameras for automatic claims assessments, drones, and other devices), driverless car insurance, and others.

Let’s look at the trends that are shaping the insurance industry and how digital technologies are driving the change.

One of the biggest bottlenecks for adopting these trends in insurance has been exposed! The half-trillion-pound insurance industry is still supported by its subpar legacy digital infrastructure. It is stuck on a mainframe that runs in the basement of a data centre, has a limited licence and is still involved in all of the UK’s economic activities.

There is no doubt that insurance is becoming more technologically advanced. Technology trends are dramatically changing the way insurance works, creating endless opportunities. These trends suggest that the insurance sector has the potential to gain new value to the tune of billions of pounds. One of the key differentiators in the coming years will be who is the first to get their hands on a Kubernetes cluster and a modern microservices architecture. Some will bury themselves in the “new” legacy, and some will adapt, survive, and thrive.

Growth and prosperity in Europe’s economy rely heavily on the insurance sector. European insurers bring in more than €1 trillion each year. They also employ almost 1 million people and put back into the economy nearly €7,500,000,000. Important yet antique, insurance systems have not changed in over three centuries. The importance of digitalization cannot be overstated.

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