My realistic expectations for the 2020 insurance industry

Summary: Visualize a meter that ranges from No Change (1)  to Total Transformation (10), I expect the actual realistic changes to the 2020 Insurance Industry meter to register somewhere between 1 and 2.

Thinking about and creating the insurance industry trends for the next year was always a fun exercise whether I was at The META Group, Financial Insights (IDC), or Ovum (now Informa Tech I believe). Each trend captured the opinions from our team of technology-focused insurance industry analysts concerning what we thought would occur over a 3 – 5 + year period for each specific issue. Once the trends were finalized by the team, our trend report drove a significant part of our research agenda for the following year.

Instead of ‘trends’, I decided to publish my realistic expectations for the 2020 insurance industry:

  1. The League Tables (ranking of insurance carriers) for each major insurance line of business will look the same at the end of 2020 as the tables look at the end of 2019.
  2. There will continue not to be any (statistical or otherwise meaningful) correlation between investment levels in startup insurance firms and any measurable impacts on incumbent insurance firms specifically or the insurance industry generally. (Hype does not equal reality regardless of how much PR digital ink is spewed by the startups !)
  3. Insurance firms will continue in their grand tradition of exhibiting ‘magic bullet’ syndrome: believing that the latest technology or technology application can  resolve their major business objectives and can be implemented by using minimal company resources.
  4. Insurance firms, particularly in the US and Europe, will continue to struggle to rationalize the large multiplicity of each of their core administration systems (i.e. policy administration, billing, claims management systems).
  5. Independent agencies (& broker firms) will continue to sub-optimize their operations by not acting in the reality that they are ‘joined at the hip’ with each of the carriers they conduct business.
  6. Although insurance firms will continue to recognize the absolute criticality of data, the firms’ various data elements will collectively behave more like useless sludge than a clean and useful resource.
  7. The lack of clean, standardized data will continue to hinder (stop?) insurers from achieving successful deployments of customer-facing (and other market-facing, including producer channel supporting) initiatives.
  8. Most insurers will continue to give ‘lip service’ to providing world-class customer service.
  9. The number of independent insurance agencies and insurance broker firms will continue to decrease as M&A continues in the producer channel but the number of agents / brokers will remain stable.
  10. 5G, immersion technologies (AR and VR), and enterprise streaming will join the never-ending parade of technologies / technology applications in 2020 that already is chockablock with other ‘supposed insurance firm immediately must haves’ that include leveraging social media, offering increased functionality on mobile devices, virtual agents / chatbots, interactive video for client onboarding and customer service, IoT, Big Data, cognitive computing, deep learning, and machine learning – all of which technology firms will use as ‘door openers’ as they reach out to insurance CIOs and CTOs.
  11. Cyber risks will continue to cascade through any device connected to the Web used, owned, leased, or otherwise in the possession of society (families, individuals, businesses, Federal / State / Local governments, and the military) adding more pressure on insurers to decide whether or how to profitably offer protection or services.
  12. I’ll continue to hope, in vain, that increasingly more insurance firms will realize the importance of using geospatial solutions as critical components of decision-making whether the geospatial data comes from terrestrial or Earth Observation sources.

Unlike the annual Trends reports I was involved with through the years, the above list will NOT (directly) drive the blogs I write in 2020.

2 thoughts on “My realistic expectations for the 2020 insurance industry”

  1. A good note of predictions Barry. While I am with you on the concept of Insuramce and their carriers has remained the same right from inception and will remain so forever, it is in the earnest of things to appreciate the technology that supports and eases the insurance processes. This is completely my opinion having been part of a large insurer in India more than 13 years and having been part of solution provider to carriers across the globe as domain consultant for another 12 years. This doesn’t mean I advocate Insurtech becoz I am completely against that concept. Once an Insurer, always an Insurer. Have a good day.

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    1. I agree with you that technology and its various applications supports insurance business processes. Of course, I also agree with you that an insurance firm remains an insurance firm regardless of what technology the insurer firm uses to support its business processes. That is not my opinion. That is a legal fact.

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