INDUSTRY INSIGHTS partnerships might include embedding risk transfer , creating new distribution sources , or sharing data in exchange for risk transfer alternatives . Partnering with big tech can also either eliminate or reduce non-value-added decisions , including risk assessment decisions with low-risk complexity , and free up human capital and resources to concentrate on higher value and greater risk complexity assessments and decisions . From the client perspective , the efficiencies coming from seamless underwriting and claims processing are valued . Unfortunately , they still don ’ t see innovation driving lower premium pricing .
Currently , the biggest areas of demand include customer preferences and digital transformation ; systemic risks , including environmental , social , and governance ( ESG ); premium pricing ; overall macroeconomic conditions ; and geopolitical risk . Consequently , the industry is being forced to transform to ensure that added value , transparency , efficiency , modernization , and relevance are delivered effectively to their customer base .
The report also found that talent and innovation remain the two major areas of investment for brokers and carriers . Returns on investment in these areas were also perceived as the highest . Even though they rated their technology investment as slightly higher , these groups agreed that investment in talent delivered more value . These areas are directly linked to companies ’ ability to maintain their market leadership through superior underwriting and risk management expertise . It is always preferable to have a strong mix of both , but companies in various segments may prioritize investments unevenly , which can result in a costly catch-up later .
The evolving risk landscape — including global health , economic uncertainty and rising inflation , geopolitical risks , increasing cyberattacks , supply chain disruptions , and natural disasters — have had an enormous impact on the insurance industry . Combined with changing consumer expectations , technology innovations , and market conditions , the industry has responded incredibly well . With policyholders expecting customized service , transparency , data , and innovation from their insurers , operational innovation has been key to the insurance industry ’ s strength .
CARRIERS ARE REALIZING THAT INVESTING IN TECHNOLOGY IS A BUSINESS IMPERATIVE AND ARE MAKING INVESTMENTS RANGING FROM CUSTOMER PORTALS AND AUTOMATION TO AI AND PRESCRIPTIVE ANALYTICS FOR UNDERWRITING .
Brokers are also investing in technology that improves the efficiency and efficacy of their work with clients .
As insurance professionals become more technology proficient , successful brokers are broadening their abilities through the expansion of advisory services to augment their product-selling capabilities . Brokers are also honing their “ soft skills ” while increasing data analytics capabilities and technical expertise .
As a means to offset rate increases , brokers and carriers are leveraging technology to add value to the client experience . According to the report , some brokers say that they feel they are losing credibility with their clients because premiums are increasing while limits are lower as carriers are reporting record profits .
The good news is there has been a positive impact in market conditions regarding carrier growth and profitability with increased rates , tightened underwriting standards , and reduced capacity in some lines of business or products . Inflation and increased exposures coming out of the pandemic brought about a tailwind to brokers ’ commissions and growth , and , as a result , the ground may be set for new and nontraditional insurance players to capitalize on this market dislocation .
In order to counteract the impact of such competitors , traditional insurance carriers and brokers must continue investing in new technology , bring in fresh talent from diverse backgrounds , and prioritize quality training to ensure that their teams have the latest , state-of-the-art capabilities required to compete successfully in the ever-evolving insurance industry .
The most important thing to remember is to stay informed . JGS is here to help answer all of your questions . +
BY : GWENYTH P . LUU , CLCS DIRECTOR - COMMERCIAL LINES JGS INSURANCE , A BALDWIN RISK PARTNER
Gwenyth P . Luu helps organizations improve their bottom line and lower their total cost of risk by implementing the JGS Proactive Service Platform . The JGS Proactive Service Platform is an inclusive strategy that focuses on primary cost drivers of a risk management program . Gwenyth helps businesses understand all of their potential and actual costs and liabilities , execute an actionable strategy , and deliver superior client service and support . The JGS Proactive Service Platform is driven by continuous strategy and service delivered on a daily basis throughout the year . The service platform includes risk control strategies , claims advocacy and management , contract reviews and insurance program design reviews .
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