Insurance

4 biggest 2022 insurtech trends + how they will affect you

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As a new year begins, most of us are inundated with two things: 1) post-holiday ennui and 2) a seemingly endless string of 2022 trend pieces. 

Well, we’ve got one more for you. Today, we’re specifically talking about the tech trends driving insurance in 2022. 

Why do you care? Because you’re likely one of the 215 million drivers who has auto insurance or you’re one of the more than 70 million people who have home insurance (or you’re both!). You should know what’s happening in the industry now and heading into the future because it can affect your coverage, your claims and how much you’re paying.

Without further ado, here are our predictions for the insurance tech trends that will rule the market in 2022 and — more importantly — how they will affect you.

Data sharing through connected devices

Insurance from the perspective of the insurance company is all about measuring risk. They want to be able to predict as accurately as possible the chances that something terrible will happen to you, your car or your home. The more information they have to access that risk, the better. 

The number of connected devices like telematics and car-tracking devices, fitness trackers, home assistants and smart phones can increase the amount of information they have about you. And the number of devices people have is only growing. Experts estimate that by 2025 there will be up to one trillion connected devices. Carriers can use this information to better understand you and calculate the risk your driving, lifestyle and more can pose.

What this means for you →

As connected devices and data sharing is increasingly used by insurance companies, you have a choice. You can protect your data privacy and share less, or you can offer more information and potentially save.

Digital transformation

This trend is one that continues across basically all industries: moving more and more processes to be as digital and cloud-connected as possible. Due to the COVID-19 pandemic and the increase in remote work, there have been greater leaps than ever in digitization. The insurance industry has long been known for paper pushing; however, most insurance companies have realized it’s no longer feasible or efficient. And more importantly, it’s not the customer experience that people have come to expect.

Another sub-trend within this trend: embedded insurance. Essentially it’s a way for companies to embed an offer of insurance at the point of sale, thus catching you, the consumer, at the precise moment you’re thinking about insurance. For example, offering rental insurance as you sign a lease on a property or travel insurance when you book a plane ticket to France. Digital transformation and data sharing (our first trend above) make an increase in embedded insurance both possible and probable.

What this means for you →

Put your pen down because eSignatures and digital forms will be even more normalized in 2022. This also means with most big name insurers you will be able to file claims and complete most actions with your insurer from account opening to policy renewal all online.

Artificial intelligence and robotics

You were probably thinking, insurtech is not nearly as sexy as other industries’ tech trends. Where are the robots? As luck would have it, one of the trends growing in the insurance industry is AI technology, machine learning and robotics. 

AI is already transforming the insurance industry and helping to streamline processes. It’s used in everything from claims processing and underwriting to fraud detection and customer service. Many big insurance companies including Geico, Lemonade, Allstate and Lincoln Financial use chatbots for customer service which makes it easier to answer simple questions 24/7 and save live customer support for more complex queries. A 2021 survey of insurance companies by PWC found that customer experience is currently the most effective use of AI. 

Meanwhile, robots and drones have the potential to improve claims handling and inspections because they can safely go places that humans cannot. For example, Farmers Insurance has been trialing a robot dog called “Spot” that’s digitally controlled and equipped with sensors that can be used to assess damage after natural disasters like hurricanes, tornadoes and earthquakes.

What this means for you →

Better, safer risk assessment can mean faster underwriting and a more efficient claims process. Chatbots can also help get your help when you need it. Lemonade asserts that, as early as 2016, their chatbot Jim was able to settle a claim in 3 seconds. Robotics and AI are only getting more prevalent, so look for more in 2022.

Sustainability

A global issue that’s not going away in 2022: climate change. Insurance companies have a vested interest in promoting sustainable practices both inside and outside their organizations. After all, they are increasingly called upon to pay claims for climate-related windstorms, wildfires, hurricanes and floods. In 2020, climate-related natural disasters generated losses to the tune of $81 billion. 2021 was no improvement, with natural catastrophes causing an estimated $105 billion in global insured losses, the fourth highest since 1970. 

Insurance companies as a whole were making commitments to take a stronger stance on ESG (environmental, social and governance) issues in 2021. Here you can read about a few of those climate commitments. In 2022, these efforts will likely continue as insurance companies take on more sustainable practices.

What this means for you →

Keep an eye out for sustainable insurance products like green behavior discounts (for example, lower premiums for driving an electric vehicle), energy generation benefits (for example, policy perks for generating energy from solar panels) and green rebuild (coverage that replaces damages with eco-friendly versions).

2022 starting out strong

The world has seen a lot of change and a lot of instability in the last couple of years — to say the absolute least. While not all of these changes have been positive, in some cases, they’ve lit a powder keg for innovation and digital transformation. 

These advances in insurtech are going to improve your experience as a customer and make things faster and easier to do online. In light of a new year and new innovations, you might be ready to make a change of your own. Shop around and see if you could be saving more on your car or home insurance. 

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