Trend Study: The Future of Insurance
The trend researchers of the 2b AHEAD ThinkTank have once again produced a groundbreaking trend study for the insurance industry – by now the institute’s fourth. We analyzed how customer demands on insurance providers will change during the next ten years. The consequence of continuing digitalization will be that customers will meet adaptive insurance products in every sector. Adaptive products and services are those that adapt themselves to changing usage situations automatically on the basis of real-time and predictive data analyses: individualized for each customer and engineered for every specific situation. And precisely this is what customers will soon expect from the insurance industry. By 2026, insurance providers who do not offer adaptive products will no longer be able to compete. On the way to adaptive products, insurance organizations themselves will become adaptive. The focus will no longer be on the digitalization of the POS. Of much greater importance will be the real-time data generated over digital customer interfaces. This will be the core and launch point for adaptive insurance products and adaptive insurance companies.
What will disappear? Standardized customers, standardized products, and standardized prices!
Digitalization is sweeping away our previous notions of the ideal business model. From business schools to professional training seminars, the three-link process of standardized products for standardized customers at standardized prices has been a classic non plus ultra in management studies. But this will soon disappear. Progressive digitalization will eliminate our concept of “standard,” and will do so across the board.
What will appear? Digital risk managers, damage preventers, and faster-than-real-time
In 2026 it is highly probable that the majority of customers will use intelligent digital risk assistants. The customer’s risk status will be recognized at all times through data analyses and compared with their ideal risk profile. Insurers will then become risk managers and risk coaches. As coaches, they will prevent damages from occurring. As risk managers, they will conduct the real-time, modular regulation and prevention of new damage probabilities. Customers will only assign the role of risk manager for their security network to a single provider – and often only once. This company does not necessarily have to originate from the classic insurance sector. Who it will be remains open. Players from across industries will fight for this position. As a result, insurance providers will abandon their divisional structure as they move towards adaptive products, and will offer customers a comprehensive product that models their entire risk profile. The focus will lie on the continuous prevention of risks and the provision of relevant services.
En route to the world of adaptive insurance products, insurers will continue to change their perception of data. No longer will the static data of the past nor the real-time data of today’s e-commerce platforms be the essential foundation for business. Instead, future insurance models will be developed using predictive data. To put it simply: In the near future, software programs will predict and control processes and decisions on the base of this prognoses. The result for insurers: The most sought-after auto insurer will not be the one who tops the lists of today’s comparison platforms and offers the lowest online rates. The most sought-after auto insurer will be the one whose digital risk assistant tells the customer: “Please drive away from this location. This street will flood in 20 minutes.”