4 biggest 2022 insurtech trends + 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.

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.

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.

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. In 2022, these efforts will likely continue as insurance companies take on more sustainable practices.