Predicting the future is difficult. I should know, having just finalized our work on the 2023 insurance predictions. So I was intrigued to see topics at The Future of Insurance Europe 2022 event in Amsterdam. The following are the top four themes that stood out for me.

The Insurance Protection Gap (IPG) Is A Pressing Issue In The World Today

The IPG is expanding globally due to an increasing disparity between economically beneficial and accurate insurance coverage. Many countries’ current policies do not adequately protect people, property, services, and vital infrastructure from natural disasters and climate change. As a result, IPG has become a critical concern. Economic health, GDP, and demographic transitions are among the factors influencing the ever-changing character of IPG. The threats such as climate change, cyber risk, the pandemic and technological and behavioral changes also contribute to the nature of the IPG. Insurers could solve this issue in various ways, including by developing unique products such as parametric insurance, micro-insurance, and micro-event insurance to boost customer access to insurance and trust in the sector. The government and PPP partners can help with public insurance, mandated schemes, and subsidized initiatives.

Environmental, Social, and Governance (ESG) Considerations Should Be At The Core Of Any Business Strategy

Green insurance is getting a serious boost from Europe’s insurance companies. COP26 (and now also COP27), a more conscientious consumer base, and increased pressure from investors have contributed to the rise of ESG issues to the forefront of insurance industry strategy. For instance, the insurance industry has adopted Munich Re’s performance guarantee for solar power producers and Lemonade’s Crypto Climate Coalition to precisely quantify weather risks, automate claims assessments, and provide funding for African farmers. I appreciate the attention paid to ‘E’ of ESG at the conference. However, I couldn’t help but wonder: What about the ‘S’ and ‘G’ in ESG? Not a single word was spoken about social or governance factors. We must have a financially inclusive society (S) and well-governed decision-making, from sovereign policymaking to the rights and responsibilities of different participants in corporations (G).

The Emergence Of Data-Driven Insurers Is Creating New Possibilities

Even though the insurance industry has a bleak outlook for the short term, there are some bright spots, such as continuous underwriting with dynamic adjustments and the use of data in insurance fulfillment, procurement, claims management, fraud and recovery, and data-driven decision-making. Some current trends in these areas include video expertise, picture-based claims assessment, real-time fraud detection, and AI-assisted decision-making. Lemonade, By Miles, and Getsafe are just a few examples of data-driven insurance providers implementing trend-based features to provide more value to their customers with less administration. The insurance carriers should learn from these insurtechs and collaborate with them for an enhanced customer-centric and frictionless experience.

The Silence Regarding Distributed Ledger Technology (DLT) Was Deafening

Organizations that take a “technology-first” stance still have DLT on their radar, even though it was the most overhyped technology of the late 2010s. There was an eerie lack of discussion about DLT at the conference. Is this a sign of widespread disillusionment with the technology’s potential in the insurance industry? Is it because of a failure to collaborate within the insurance ecosystem, a narrow focus on the blockchain component of an entire end-to-end insurance process, or a general misunderstanding of DLT, including some persistent myths? As I walked away from the event, I could not stop thinking about the use cases of DLT in the insurance industry.

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