Top trends the insurance industry is set to see in 2023
Top trends the insurance industry is set to see in 2023 28th January 2023
Financial products and services are constantly evolving and adapting to changing market conditions and customer needs. The insurance industry is no outlier with the ultimate goal of increasing insurance penetration. It undergoes massive changes each year to use potential opportunities within the scope of the law to increase customer satisfaction and insurance awareness.
As we move into 2023, general insurance companies in India expect significant changes that will redefine the perception of insurance. While some align with predicted global trends, many are likely to contribute to domestic consumer trends and legal amendments.
Here is a quick rundown of some top insurance industry trends predicted for 2023!
1. Portfolio diversification through product innovation:
Increased product development innovation is expected globally to address the unique needs and risks of emerging technologies such as electric vehicles, smart cities, and the Internet of Things. Cybersecurity insurance is likely to continue as a highly demanded product. As the consumer-centric approach of the industry grows, diversification is expected to be based on evolving consumer needs.
2. Additional offerings:
Insurance companies may distribute other financial products as per the Finance Ministry's proposal. While the proposal is yet to be clarified, veterans speculate that the approved products could include allied insurance products, investment, or value-added services.
Insurance companies are set to benefit from their well-established distribution channels, adding to their revenue from a secondary source.
A proposal to issue composite licences is also under discussion, opening up opportunities for general insurance companies in India to sell insurance policies, favourable mergers, acquisitions, and massive expansions in revenue and product portfolios.
The use of technology, such as artificial intelligence and data analytics, will steadily increase and provide insight into customer behaviour and preferences. This offers an excellent opportunity to efficiently use human intervention and improve the efficiency and effectiveness of operations by harmoniously using digital and human efforts.
The pick-up of technological advancements has been slow across the global insurance industry, but this is expected to change in 2023. Insurers will invest in digital platforms and tools to provide personalised and convenient services to customers. Digital channels will likely be used for sales and service and to support underwriting and claim settlements.
6. Value-based brand building:
With the entry of new competitors amid an incoming global recession, insurance companies may have to rethink their approach to changing customer perception and stricter regulations. As consumers tightly clutch their wallets, companies will have to build greater awareness regarding their products and their significance amid uncertainties. This will build a connection based on values that their audience resonates with, including transparency.
7. New distribution channels:
With the rise of insurtech start-ups, the insurance industry is expected to see a boom of new distribution channels, such as online marketplaces, digital brokers, and comparison websites, making it easier for customers to access insurance products and compare prices.
8. Entry of new players:
The growth of the Indian insurance industry has largely been dependent on the Insurance Act of 1938 and the Insurance Regulatory and Development Authority Act of 1999.
The winter session of Parliament discussed proposed amendments, including the scrapping of the statutory requirement of INR 100 crore start-up capital for life, health and general insurance companies in India and INR 200 crore for reinsurance business. This move will likely result in new entrants in the market, increased competition, and possibly making premiums cheaper.
With increasing internet use, rural India is an untapped market that general insurance companies in India can explore through efficient digital channels that make insurance accessible.
Slated for rapid growth, the insurance industry will see several significant changes in 2023 as it adapts to new technologies and evolving customer needs. By focusing on global trends, digitalisation, and customer satisfaction, non-general and general insurance companies in India can curate a path to be at the forefront of the insurance industry's future!
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Disclaimer: The information provided above is for illustrative purposes only. To get more details, please refer to policy wordings and prospectus before purchasing a policy.