The COVID-19<\/a> pandemic caused many industries to pivot in 2020, and the insurance industry was no exception. The resulting fallout changed not only the definition of risk in insurance<\/a> but also shifted customer needs and expectations while speeding up the virtualization of insurers overnight.<\/p>\n Historically, insurers tend to be risk-averse and usually hold back on being at the forefront of new technology. But, new sources of innovation, such as InsurTech<\/a>, are driving change in the industry. This new mindset, combined with changing customer and agent expectations and the desire to cover unknown risks with specialized products, will drive industry trends in 2021.<\/strong> These trends are paving the way for the future of insurance by allowing insurers to utilize new technologies that tailor products to their customers and their needs.<\/p>\n Let\u2019s take a look at what three main trends are changing the insurance industry this year<\/p>\n In 2019, millennials overtook baby boomers as the largest generation of adults in the United States. The rapidly changing demographics of both customers and agents create increased expectations on your ability to provide a digital experience and a need to provide more tailored products to your customers.<\/p>\n Older millennials are heading into their peak earning years, starting families, purchasing homes and making complex buying decisions. In 2020, millennials and Gen-Xers owned over 60 percent of small businesses in the U.S. As these generations become your primary focus for new customers, you\u2019ll have to pivot your types of product offerings and processes to reflect this new generation.<\/strong><\/p>\n Millennials and Gen-Xers are driving a huge digital shift in the business insurance industry as these consumers often trust and expect to use technology for complex buying decisions. They prefer mobile apps and online portals over speaking to a representative. As a result, your insurance company must continue to create tools where your customers can access all the content and services they need in one click. Insurance companies and agents who continue to innovate and adapt to an increasingly tech-filled world will be the ones who thrive in the industry in 2021.<\/p>\n Despite the turmoil the insurance industry faced last year, global investment in the InsurTech sector reached an annual high of $7.1 billion. Investors have recognized how invaluable InsurTechs are for their targeted solutions and how they can help companies prevail during times of instability.<\/strong><\/p>\n The pandemic is only one of the powerful drivers pushing the insurance industry towards accelerated innovation and transformation. Other notable automation drivers include:<\/p>\n Insurance companies are seeking out new technologies and innovative methods such as customer journey mapping<\/a>, design thinking, lean process mapping and intelligent automation<\/a> to make processes more efficient, reduce expenses and evolve with consumer expectations.<\/p>\n While much of the investment InsurTech drives has resulted in targeted and innovative solutions, it presents carriers and brokers with the challenge of integrating these solutions into both your business and technology architectures. As a result, this year, we will see the adoption of more sophisticated event-driven architectures that continue a shift toward business-driven events as a way to integrate smaller, targeted systems and services vs. traditional request-response patterns. This will drive flexibility for the overall processes and enable faster response, intelligent automation and improved decision-making.<\/strong><\/p>\n1. Changing Demographics Require a Different Approach<\/h2>\n
2. InsurTech Capital Is on the Rise<\/h2>\n
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