10 trends that will shape insurance in 2021

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Insurance Policy, Premium, Coverage, Claim, Deductible, Liability, Risk Assessment, Underwriting, Health Insurance, Life Insurance, Auto Insurance, Homeowner's Insurance, Renters Insurance, Disability Insurance, Accident Insurance, Casualty Insurance, Insurance Agent, Insurance Broker, Policyholder, Insurance Fraud, Risk Management, Reinsurance, Insurance Benefits, Indemnity, Actuarial, Comprehensive Coverage, Umbrella Insurance, Long-Term Care Insurance, Term Life Insurance, Insurance Adjuster, Mortgage, Attorney, Lawyer Loans, Credit Rehabilitation, Degree Hosting, Software Trading, Casino Health, Fitness Weight loss, Lawyer Doctor, University Education, Conference Motorcycle Accident, California Law, Million, GJEL Accident Attorneys, . Bay Area Navy Officer, Construction Accident Attorneys, Oilfield Accident Settlements, Verdicts, Attorney for Your Slip, Calculating Damages, Verizon Business High Speed Internet Bundles, Car Accident, Trucking Accident, Novo Bank's physical and virtual debit cards, Personal Injury Lawyers

2021 is bound to bring its fair share of unexpected events, yet there are 10 key trends—such as the expansion of major players, a swift move towards environmentally friendly practices, a shift towards insurance based on actual usage, and the emergence of Bitcoin as a novel category of assets—that are poised to significantly influence the insurance sector in the coming year.

The pandemic caused by COVID-19 has shown us the foolishness of attempting to foresee what lies ahead. However, it has also encouraged us to envision possible scenarios for the times to come.

At the beginning of 2020, hardly anyone anticipated the global chaos unleashed by the COVID-19 pandemic. This event became the most significant occurrence of the past year, surpassing all other events. The forecasts made by economists, market experts, and financial advisors were all rendered obsolete by an unforeseen worldwide crisis.

Looking forward to the potential of 2021, it’s wise to acknowledge the inherent uncertainty of life. If things were predictable, there would be no necessity for insurance. Indeed, the unknown aspects of our existence are what make insurance essential for the stability of our lives.

Which major occurrences will cause global tremors in the coming year? Will it be fluctuations in international politics, unexpected economic developments, revolutionary advances in tech, or perhaps a new pandemic? It’s uncertain. Nonetheless, we are able to spot significant patterns that are surfacing following the aftermath of the COVID-19 pandemic.

Unexpected events on a worldwide or local scale could still influence these emerging trends, which are already beginning to gain traction. The pandemic has hastened many of these trends. Identifying these trends promptly will allow insurance companies to adjust their operations to meet the evolving demands of their clients, and offer new, possibly profitable, products and services.

I’ve identified ten major trends poised to significantly influence the insurance sector in 2021.

Trend 1 Reinterpreted: An uptick in the demand for health and wellness offerings.

The coronavirus outbreak has elevated health and wellness as a priority for consumers. Insurance companies have reacted by enhancing their usual health and life insurance offerings with a variety of digital health and wellness tools and programs. Those insurers that swiftly build a solid footing within the health sector will secure a significant edge over rival firms.

Trend 2: The blend of physical and digital experiences, known as phygital, becomes the norm.

Online platforms and digital methods of distribution are set to replace traditional methods as the main way customers interact with insurance carriers. However, there will still be a demand for in-person services and professional advice when dealing with intricate options and policies. The pandemic has accelerated the shift towards digital services, and it’s unlikely that consumer behavior will revert back to old patterns. Insurance providers who integrate digital services with hybrid digital-physical (“phygital”) experiences, especially on mobile devices, will stand out in the market. Insurance carriers that are sluggish in introducing appealing digital services risk losing their clientele.

Trend 3: An increasing number of insurance providers are expanding their business operations beyond traditional insurance offerings.

Rapid developments in digital technology are creating numerous chances for insurance companies looking to venture into new markets beyond their regular domains. Anticipated stagnant premium incomes and modest returns on investments for the year 2021 are expected to hasten this movement. It is likely that insurance providers will reveal some unexpected alliances in their efforts to diversify their sources of income.

Trend 4: Specialized products stand out.

Following the COVID-19 pandemic, insurance companies introduced a variety of new risk-management solutions. There will be a surge in demand for customized insurance options, including those for small business continuity, cyber-threat defense, pandemic-related coverage, and event cancellation. Products catered to distinct age segments, like young adults or the retired, are expected to gain much attention, offering chances for established insurers to collaborate with insurance technology startups.

Trend 5 suggests that the leading players in the industry will continue to expand their influence and size.

Recently, pioneering insurance companies have been in the spotlight, receiving significant investments. But, it is expected that this year, established insurance providers will take center stage. Thanks to their strong financial assets and considerable internal capabilities, they are well-prepared to withstand potential economic challenges and capture fresh opportunities for income. The insurance sector is anticipated to witness considerable consolidation through mergers and acquisitions in 2021.

Trend 6: Establishing trust is imperative.

In 2021, gaining customer confidence will be paramount for businesses. Customers will demand that their service providers not only deliver excellent service and offer good value, but also ensure the security of their private data. Additionally, customers will insist that these companies conduct themselves morally in every aspect of their operations. Insurance companies that are seen as having violated their customers’ trust stand to suffer significant damage to their reputation.

Trend 7: Embracing eco-friendly practices is essential for the long-term.

This year, insurance companies will face increasing demands to show their commitment to sustainability efforts tackling issues like climate change, environmental contamination, and social inequality. Those insurers that take initiative and implement tangible reforms in their operations to become genuinely sustainable will stand out from the rivalry. By doing so, they will enhance their brand reputation and circumvent the need to comply with potential future regulations.

Trend 8: Acceleration towards environmental sustainability.

As regulators, investors, and customers increasingly turn away from fossil fuels, insurance companies will intensify their support for renewable energy. We can anticipate some insurance providers severing relationships with businesses reliant on fossil fuels. Car insurance companies will probably offer additional perks to encourage policyholders to adopt electric vehicles. A few might even publicize plans to cease offering insurance for vehicles powered by gasoline and diesel.

2021 Technology Outlook for Insurance: We present five developing technological movements expected to influence the insurance sector in 2021 and the years to follow.

LEARN MORE

Trend 9 Changing: The discontinuation of fixed premium payments.

The popularity of pay-per-use insurance plans is expected to skyrocket since a growing number of customers appreciate the adaptable and budget-friendly nature of these innovative options. Anticipate that a significant car insurance provider will abandon traditional fixed rates in favor of pricing based on actual usage. It’s likely that additional insurance companies will promptly adopt this model.

Trend 10: The appeal of cryptocurrencies continues to grow.

Due to persistent low interest rates reducing the profits from their investments, insurance companies will likely consider incorporating different types of assets into their financial holdings. A rising number of financial institutions are recommending cryptocurrencies, with Bitcoin being a notable example. MassMutual made a notable move by allocating $100 million to Bitcoin for its main investment account. It is anticipated that numerous other insurance providers will begin to diversify their investment strategies to include cryptocurrencies.

No matter what unfolds in the upcoming year, I’m confident it will be filled with unexpected events. If you believe I’ve misjudged any of the trends I’ve mentioned, feel free to reach out. I’m eager to listen to your opinions.

Until that time, I hope you have a prosperous and fulfilling year in 2021.

Please note: The content of this document is solely for informational use and should not be considered as advice tailored to any individual’s personal situation. It may not represent the most up-to-date data or information. Accenture fully renounces liability, within the limits allowed by law, for any inaccuracies or incompleteness in this document, as well as for any actions taken based on this information. Accenture is not a provider of legal, compliance, auditing, or tax consulting services. It is the responsibility of the reader to seek guidance from their own attorney or qualified expert for such matters.

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