Four ways data and analytics are transforming insurance

While not new to the insurance industry, the proliferation of digital technologies and the increasing availability of structured and unstructured data has exponentially increased the use cases for data and analytics. 

Today, these include new forms of risk analysis, which are driving revenue growth, reducing fraud, and increasing operational efficiencies. 

Data-driven decision-making helps not only underwriters, but also agents, brokers, and MGAs to grow into new markets while boosting profitability. Here are some of the most compelling ways insurance firms throughout the value chain are using data and analytics:

1. More accurate risk assessment and underwriting

Ever since the industry’s origins in the 1600s, underwriters have used the available data to analyse and predict the likelihood of certain events. Back then it was the odds of merchant ships arriving back in Europe loaded with tradable goods. 

In the centuries since, data usage has transformed to incorporate almost every type of risk, including those that are new or rapidly evolving, such as natural catastrophe and cyber security. Fast-moving risks like this require huge volumes of data and the ability to collect and analyse them in as close to real time as possible. 

MGAs are increasingly combining specialist market knowledge with sophisticated risk models to underwrite new business more profitably than many carriers can. Brokers and agents are also benefiting from the ability to sell a wider range of more specialist products into new markets, worldwide.

2. Driving business growth

We have seen how MGAs are able to use their specialist knowledge to drive business growth by winning capacity from carriers in new emerging or fast-moving risk types, such as cyber and niche SME business. The same is true across the value chain, where those insurance firms with access to more data – and the ability to analyse it – can either win business from their competitors or else carve out new, under-served markets. 

Many brokers and agents are using data and analytics to improve customer retention through relevant cross-selling and identifying better value products for clients at renewal. Those insurance firms with cloud-native insurance platforms are also better able to segment their customers and tailor their offerings and marketing messaging.

Many InsurTechs and tech-savvy carriers are also analysing customer data to devise more appealing and appropriate products for specific customer segments. Embedded insurance is another way carriers can meet their customers at the point of sale by offering insurance products through new channels or by bundling it in a product experience.The London market is seeing a lot of this sort of innovation in the commercial space, while carriers in emerging markets are developing new products for small businesses and communities who have lacked competitive tailored coverage up to now. 

3. Improving claims ratios 

With escalating claims inflation, reducing claims where possible is sure to be as important as ever. Many carriers are increasingly using sophisticated data analysis to spot fraudulent claims, eliminate higher risk customers from their books, and process genuine claims faster and more efficiently. Some are even going one step further by leveraging IoT or wearables to collect even more data to better drive their decisions. All of this is leading to lower claims costs and improved ratios. MGAs’ sophisticated underwriting models are also in many cases leading to better claims ratios. 

4. Optimising operations 

Another way many insurance firms across the value chain are using data is to improve operational efficiency. Analysing data from various business processes allows firms to identify bottlenecks and inefficiencies and implement changes to eradicate them.

Overall, the use of data and analytics in the insurance industry is increasingly essential for informed decision-making and improving business performance. However, many legacy brokers, agents, and underwriters suffer from operating multiple systems and data silos, making customer data harder to access, harder to analyse, and harder to keep secure. 

This is why so many fast-growing companies within insurance are increasingly looking to consolidate their data and systems onto a single, modern cloud-based insurance platform. 

Get in touch today, to find out how Novidea’s born-in-the-cloud insurance platform, built on Salesforce, can help your business grow revenues and optimise operations, through better use of data and analytics.

BIBA – bigger than ever and ‘Rising to the challenge’

It was great to be back at BIBA this year. The exhibition hall was busier than ever, with a fantastic, diverse portfolio of products and services, and a stellar line up of content in the main auditorium and around the fringe. It’s one of the few events that really brings together every element of our value chain – brokers, insurers, actuaries, platform providers, infrastructure, and security – all with a common goal of delivering service excellence to customers.

The BIBA Insurance Conference is one of the largest and most significant events in the insurance industry’s calendar each year, with a record of over 9000 people through the doors of Manchester Central; a real triumph for Steve White and the entire BIBA team.

For the Novidea team, out in force with a stunning stand to match, it was the perfect opportunity to mix, mingle, and meet prospects keen to learn more about the latest from the insurance tech space. I am happy to say, our stand and born-in-the-cloud platform got lots of attention. Having some big-name client logos, such as Gallagher and Howden, definitely made a difference from past years.

The conference featured keynote speeches, most notably from Steve White, who announced that after 10 years in the role he would be stepping down as BIBA chief executive. Everyone agrees he leaves the organisation stronger than ever.

The agenda spoke of a wide range of topics, covering the ever-growing regulatory challenges, managing emerging risks, cyber security, platform interoperability, customer excellence, and professional development for brokers.

Specialty brokers – in the know

I could have been because of my previous roles in the London Market, but I got a strong sense that there was an increased presence from the sector this year.

We all know the major incumbents who have a broking footprint in these markets, with Gallagher and Ardonagh again showing the sector their brands and direction of travel. Interestingly, this was also the first time Gallagher exhibited as a Retail group, not as the individual well-known brands of Deacon, Intasure, etc.

I also spoke to more traditional specialty brokers this year, looking to learn from outside of their day-to-day processes, from a more automated, electronically traded value chain, especially with the growing trend in the London Market of facilitated risks and lineslips for the higher volume, lower premium books of business.

One of the markets friendliest of brokers, Max Odlum of CJ Coleman, said to me, “BIBA is such a great way to make new connections and learn about the developments in the Retail sector. The fact that brokers are encouraged to attend such a large event for free makes it a really attractive proposition for brokers in the Specialty space and gives us a great way to meet with existing clients and find new opportunities.”

The bigger picture

A major hot topic right now across the industry is ESG (Environmental, Societal, and Governance), and there was much said about it, including this BIBA report. Zing365 presented an excellent session highlighting that ESG is not a catch-all and that we cannot think about one without the other(s). Whilst many organisations understand the wider impact of the ‘E’, we all need to be paying more attention to the Social, Governance elements, in particular, reducing the protection gap, company tax strategies, and transparent pay reporting.

More regulation is coming, so be prepared.

Culture

For me, the standout session of the event was Thursday morning’s keynote, chaired by Fearne Cotton, discussing mental resilience. Many of the audience were not expecting such an open and inspirational discussion from the panel and, fair to say, so much emotional input from the audience at the end.

Mental health and resilience are such important topics, particularly off the back of Covid. Today, end-customers feel that the world is back to normal and high levels of service are expected from call centres/staff, etc. In reality, however, people are still working in hybrid mode and there is a big disparity between expectation and reality of teams.

Companies who drive an open and engaging culture are clearly going to produce better service to their customers. Some firms are actively getting their teams back into the office, whilst others are still in a phase of transition, seeing the benefits of a more flexible approach.

There is no right or wrong here, but there are some areas clearly suffer without an on-site model of on-the-job training to expand knowledge and share insights within a collaborative culture.

Succession planning

Whilst I am a very big fan of the hit HBO show ‘Industry’, BIBA’s Young Broker Day did a far friendlier and engaging set of sessions on the topic of the world of work in insurance.

The issue of talent acquisition and succession planning has been a hot topic in more recent years in the London Market, and whilst many organisations are making great strides, I always feel that the Retail sector seems to have a better grasp on the issue.

Naturally, the regional offices offer a wider, physical opportunity to people across the UK, unlike the London Market with it’s Lloyd’s nucleus.

The retail sector seems well engaged with the next generation of insurance specialists, with access to local talent from varying levels of education.

I can attest to this myself, growing up in Bournemouth my route into the insurance sector was through the retail space, with the likes of Liverpool Victoria, Rias and AJ Gallagher brands like Insure 4 Retirement and Deacons).

Regulation

And last, but by no means least: regulation! The stringent requirements now demanded by the FCA across the insurance sector are proving to be a challenge for everyone, but more so for the smaller brokers, which can be less well-resourced in compliance and without the financial capability for enterprise data and reporting tools.

With the Consumer Duty changes coming into effect from July 2023, ESG reporting for smaller firms and the expected improvements to mental health training / reporting from the government is a very real and tangible issue that the UK market is facing, despite the fantastic lobbying work BIBA does on its behalf.

How can Novidea help?

Fortunately, Novidea is well placed to support our customers with many of these focus areas, including 360 views of your portfolios with intelligent insight features out of the box, supporting a changing workforce where broking on the move is as important as ever, and easy to configure regulatory reporting for the FCA.

Novidea’s born-in-the-cloud broker platform offers clients and their policyholders access to UX-focused interfaces, complex scheme rating, and a platform that manages everything from enquiry through to financial billing.

If you would like to know more, feel free to get in touch and see what Novidea could do for your business.

How MGAs are leveraging technology to gain advantage

MGAs have become an increasingly vibrant and innovative part of the global insurance market, often addressing niche or underserved markets. McKinsey estimates that there are 600 MGAs currently operating in the U.S., and 300 MGAs in the UK. And these numbers are growing.

Their role in the insurance industry is providing another vital, cost-effective distribution channel for carriers and specialist solutions and products for customers in specific insurance lines, such as management liability (like D&O or EPLI), Product Recall, Flood, Specialty Insurance, Transportation, Work Compensation are some other common examples.

MGAs also provide access to isolated geographic areas. An insurer may want to write business in a remote location, but don’t want to spend the money and resources to open an office there. With an MGA they can gain access to these markets without having to open an office or hire staff.

Indeed, MGAs play an especially important role across a variety of commercial lines, where their specialty market expertise means they can identify and underwrite emerging risks more profitably than mainstream insurers, who find it more difficult to target niche markets. 

The three most common types of MGA in today’s market are:

  1. Underwriting-led: MGAs founded by experienced insurance specialists to capture a niche in the market not currently well served
  2. Technology-led: MGAs that have acquired capacity and are writing business for commoditised lines where they can offer higher margins due to having lower operating costs and new methods of pricing
  3. Service-led: companies that are offering a range of services in a specific niche, of which specialist insurance cover is a key part

In the US, the majority of focus is on the second category: those technology-led MGAs who can write commoditised lines at a higher margin than the competition. In the UK market, categories one and three are more numerous. 

In all three categories, technology is facilitating more rapid growth. Although MGAs have been growing in importance and influence over the years, they are still young businesses by insurance industry standards, and so most of them lack the same constraining legacy technology that holds back many larger, incumbent carriers. 

Even traditional underwriting-led MGAs are therefore leveraging technology to streamline their operations and – in many cases – augment their pricing models. 

Those consumer-facing MGAs enjoying the most robust growth are those that enable customers to handle everything seamlessly online. One standout example is the UK-based MGA ManyPets, which hit a valuation of $2 billion in 2021 following rapid growth in its customer-base throughout the Covid pandemic. 

Let’s take a deeper dive into how MGAs are using technology to drive growth, according to recent research from McKinsey:

  1. Automation

Many MGAs are using artificial intelligence or machine learning to automate routine tasks and improve efficiency. This can include automating underwriting processes, risk assessment, and claims handling. By automating back-office processes, MGAs can operate much more efficiently.  

  1. Digital platforms

Consumer-facing MGAs are using digital platforms to interact with customers, agents/brokers, and carriers. These platforms enable MGAs not just to provide online quotes, but to issue policies and even handle claims digitally. In this way, they are the equal of even the largest incumbent insurers. What’s more, MGAs in specialty lines are increasingly offering this kind of slick all-in-one digital service to commercial clients too, cutting out the need for printed paperwork altogether and speeding up sales cycles. 

  1. Data analytics

MGAs are using data analytics in several ways. Obviously, for any MGA, their single most important client is the carrier which gives them capacity. As Insurance Insider puts it, “Insurers now see MGAs as part of the strategic direction for their business. They are not as nimble as they would like to be, so working with an MGA gets access to new markets and helps develop new products.”

The savviest MGAs are therefore using analytics to track the kinds of business that would be most beneficial for their carrier partners, and to prove where they are adding the most value – a crucial competitive advantage in a hard market where spare capacity is beginning to dry up in many lines. 

Secondly, MGAs are using data analytics to develop more responsive and more accurate pricing models, allowing them to underwrite the better risks at higher margins, as well as develop products for more specialist risks, such as cyber. 

Thirdly, MGAs are using data analytics to look at more granular segmentation of customers and offer coverage that better suits their needs – and their pockets.  

Many MGAs have obtained their competitive advantage through use of a born-in-the-cloud all-in-one insurance platform like Novidea’s. If you are an MGA looking to work with the best, why not have a conversation with one of Novidea’s insurance platform experts? 

If you’re a broker or agent that wants to work with a technology-driven MGA, why not get in touch and see what Novidea could do for your business?

From Delivery Manager to VP Strategy: A Career Development Success Story at Novidea

The technology industry has one of the lowest employee tenure rates among all industries, mainly due to its rapid growth. However, recent studies suggest that providing talents with the opportunity to pivot, grow, and stretch within their current companies can have a massive impact on engagement and retention.

This presents a great opportunity for companies that are wise enough to invest in career development. Nowadays, employees want to work at an organization that invests in their growth and offers development opportunities, while maintaining a personal approach.

To meet this demand, companies need to adjust their recruiting strategies, focusing not only on sourcing potential candidates and creating more awareness but also on exploring internal mobility opportunities and providing a clear process to empower employees to develop their career paths.

Meet Maayan Cyzs, Novidea’s VP Strategy

‘A friend recommended Novidea to me. At the time, I held a management position in another company, and was considering an offer that would “reduce” my seniority level, but presented an opportunity to create something new in a growing start-up and revolutionize the insurance industry.

I started my career at Novidea as a Delivery Manager, overseeing implementation projects for clients in Israel and later globally. This role exposed me to a new and dynamic business environment, emerging technologies, and a promising product. The pace was fast, and within a year, I recruited additional delivery managers and was promoted to manage the Delivery team with the close support and mentoring of my direct manager.

Together, we built a global delivery team that expanded rapidly along with our business portfolio and the scope of projects managed for our customers around the world.

After five years as Head of Delivery, and following the birth of my three boys (yes, all while working at Novidea!), an organizational change was made and  my role was split between the different regions we operate in, which led me to think about the next step in my career.

At that point, I had been working in delivery and project management for over ten years and felt it was time to explore new areas. I had two options: either search for a new position elsewhere, or create a new role within the company that I love and believe in.

Through mentoring and reflection, I identified my strengths, values, and abilities. Combined with the invaluable knowledge, experience and deep understanding of the company, its work processes, and product – I felt ready to take on new challenges and make a meaningful contribution to the company.

When I expressed my desire to transition to a new role, I received enormous support from Novidea’s CEO which far exceeded my expectations. We created a new senior management position that aligned with my vision and allowed me to contribute my expertise. The management team welcomed me with open arms, providing support, attentive ears, and guidance.

As VP Strategy at Novidea, I lead a team dedicated to supporting the company’s rapid growth, while implementing infrastructure and tools to advance our corporate strategy. This includes areas such as knowledge management, partners management, defining work processes and interfaces between departments, and supporting strategic implementation projects.

Novidea is an integral part of my life. I represent the company as I would represent myself, and I believe employees like me who identify with the organization, brand, and product make the best ambassadors and marketers. The opportunity I was given to learn, make mistakes (and grow from them) in a supportive and trusted environment allowed me to gain confidence which further catalyzes faster learning and greater experiences. As we continue to grow at an outstanding rate, it is necessary to be able to react quickly and evolve.

I strongly believe that companies should encourage internal mobility, allowing employees to apply for new jobs and positions that open up throughout the organisation, and discuss existing career development paths. Familiarity with roles and jobs can allow individuals to think creatively and expand their professional growth within the company.

Back from InsurTech New York Spring Conference 2023: The latest trends impacting the commercial insurance industry

Last month over 1,000 insurance professionals gathered at Chelsea Pier in New York City for the InsurTech New York Spring Conference. This event was a great opportunity to connect, network, take in thought leadership sessions, share best practices and learn more about the current state of the commercial insurance industry. The event featured innovative new startups to large multinational organisations. Representatives from brokers, carriers, InsurTechs, MGAs and more gathered together to discuss what is happening in our industry. Novidea was proud to sponsor, present and exhibit at the event. 

Here are the top five trends we identified for InsurTech New York.

  1. Digitisation Increases in Popularity: The growing number of companies developing ways for brokers, MGAs and carriers to digitise their operations. For decades the insurance industry has relied largely on paper documentation and spreadsheets. These often require repetitive manual workflows and are inefficient and error-prone. To help solve this problem many companies are coming up with ways to help turn physical assets into digital ones. As underwriters begin requiring more and more data to effectively cover and price insurance, the ability to quickly access information in a digital format is critical.
  1. Investors Still Interested in InsurTechs: There have been many reports that given the current economic situation there has been a slowdown in the amount of investment in the InsurTech space. While many indicators demonstrate that this is accurate, the conversations and presentations at InsurTech New York showcased that there is still strong interest in investing in InsurTechs. Representatives from the leading VC and PE firms such as MS&AD Ventures Inc, ManchesterStory, Avanta Ventures and Bessemer Venture Partners were in attendance and were busy talking to the exciting startups at the event. The biggest change in InsurTech investing is that terms may be different, valuations might be lower and due diligence will be more thorough, but there is still great interest from leading firms to continue to bet on InsurTech.
  1. The Number of MGAs Continues to Rise: MGAs have been on the rise for years. They connect the strength of established carriers with a network of trusted brokers through cutting edge technology. InsurTech New York featured dozens of different MGAs specialising in unique verticals to help deliver innovative products to the market. Many of the speaking sessions featured representatives from MGA discussing how they are helping carriers bring specialised products to the new areas.
  1. Delivering Better Customer Service with Embedded Insurance: For years insurers have been looking for ways to meet their customers’ insurance needs where they want them. Years ago, portals were the method carriers could reach their customers by allowing them to request quotes directly from their website. Now they are using InsurTech companies to reach their customers through embedded insurance. When you purchase airline tickets, reserve a hotel room, or buy an expensive electronic device, you are presented with an opportunity to insure the transaction. This is embedded insurance and it gives carriers an opportunity to meet their customers insurance needs, in real time. Many companies are helping insurers develop products and find ways to distribute insurance to their customers directly. 
  1. Progressing the Industry with Specialisation and Niche Insurance: It was only a few years ago that the idea of pet insurance became mainstream and now there are dozens of carriers writing billions of dollars in premiums helping people protect their pets. This trend has continued with more insurers specialising in unique solutions. InsurTech New York featured a number of companies that focus on very specific areas. Some of these include coverage for boats, perishable cargo, wildfire, climate change, tornadoes and many more. These companies are helping move the industry forward by developing new products and coverages that were often ignored or never existed.

Ready?

Using the best technology is vital for navigating this high-price, low-margin insurance industry. When you’re ready to go digital, reach out to the Novidea team. We’d love to discuss how we can help inflation-proof your business.

Inflation’s Impact on the Insurance Industry 

Why now’s the time to digitalize your business

Inflation is squeezing every section of the economy, and the insurance industry is far from immune. One estimate shows that rising prices in 2021 led to an increase of approximately $30 billion in loss costs (the amount insurers pay to cover claims).

MGAs and agents are already operating on thin profit margins, with the average around 2-3% per customer. So, passing the rate hike on to your customer simply won’t work. Achieving and maintaining operational resilience is going to require squeezing every ounce of efficiency from your operations. There’s never been a better time to digitalize your insurance business. Streamlining operations and improving efficiencies is a long-term strategy to help insurance organizations become more resilient, no matter what outside trends and developments come your way.

Given all that, let’s look at the ways going digital can help your insurance business thrive in this economic climate.

Activating Your Data

Soaring prices and thinning margins mean there’s less room than ever for inaccurate business decisions. Insurance businesses must begin gathering their own customer data and gleaning the insights that data has to offer. The question is how to do that, and the answer is a more powerful and flexible agency management system.

It starts with true and comprehensive integration. The right modern AMS will provide real-time access to all customer and policy data at the point of need. This is achieved by bringing every aspect of a business into a single platform, providing 360-degree visibility of the front, middle, and back office. Your people must have the power to access the data they need, when they need it, from anywhere.

Smoothing the seams between offices creates new efficiencies that already contribute to a healthier bottom line. But that’s only the first step. Once your data is consolidated, what’s to be done with it?

Putting Your Data to Work

You’ll need a platform that provides powerful analytics tools to help turn your raw data into actionable insights, facilitating better-informed decisions.

For example, a modern AMS will track the resources that are being spent on each account, from time spent selling, supporting, and traveling to relevant salary and commission costs. You can use this data to determine which accounts are most profitable. The results are data-driven insights into what kind of new accounts you should pursue, as well as better planning for the resources you’ll need to effectively manage those accounts.

Using Data to Win and Retain Customers

Encore Insurance, a digital-native independent insurance agency specializing in personal lines, needed to to revamp how its sales team managed and assigned incoming business opportunities. Unleashing their data and creating a single source of truth across the agency was paramount. Once Encore had a clearly defined picture of where growth opportunities existed, everything changed. For the first time, Encore had the ability to accurately evaluate its new business closure rate and determine whether they’re spending too much on the leads they acquire.

There is tremendous value in learning what kind of customers you want to acquire, but there’s arguably even more in retaining and optimizing the profitable accounts you already have. In fact, the cost of acquiring a new insurance customer is seven to nine times higher than the cost of selling to an existing customer. Increasing the lifetime value of your customers, then, is crucial.

Of course, along with robust and accurate service, today’s customers also expect increasingly short turnaround times. Which brings us to:

Leveraging automation

Automating workflows allows you to free your team from repetitive tasks that can become a bottleneck. For example, Novidea’s comprehensive approval process workflow can confirm authority limits, view peer reviews, and notify the right team members of activities ready to be approved.

This kind of intelligent automation helps your bottom line multiple ways, including:

  • Eliminating human error from repetitive workflows, helping protect you from potentially costly errors and omissions.
  • Reducing processing time for new policies, thereby increasing your customer satisfaction and retention.
  • Helping you keep talented team members who want to flex their expertise, not do busywork.    

Ready?

Operational efficiency, customer retention, and data-driven decision-making are vital for navigating this high-price, low-margin insurance industry. When you’re ready to go digital, reach out to the Novidea team. We’d love to discuss how we can help inflation-proof your business.

How Brokers can Demonstrate Value in a Hard Market

As the UK and global economies face record inflation increases, it is interesting to note that the insurance market got there first. Rising premiums have been a fact of life ever since the world began to come out of lockdown.

While this is perhaps a much-needed correction after years of under-pricing, it is of course putting brokers under pressure. Whenever there is a hard market, brokers are forced to demonstrate their value in a world in which ‘intermediary’ is increasingly becoming a dirty word.

With rising premiums increasing costs on top of general inflation, clients will be looking to contain expenses. So how can brokers increase their value to clients – and prove it?

The need to demonstrate value

With the FCA’s general insurance pricing reform coming into effect in January last year, the impact has been far reaching – much more so than many realised. However, the emphasis on all parts of the value chain – including brokers – to prove that they are providing fair value to customers, is actually a potential benefit.

Why? Because in a hard market, brokers who can prove that they offer value are at a competitive advantage. Now they have to prove it for regulatory reasons too, so the question becomes not whether they should, but how. Technology can provide the answers, but more of that later.

One area of concern for some is broker schemes, which typically provide cover that is tailored to address the specific needs of a certain demographic. Schemes need to demonstrate that all its policyholders are benefiting from fair value. Similarly, each new client policy now needs to be re-marketed as new business. This is a change of approach for many (perhaps most) brokers and increases the volume of administration associated with each client.

FCA rules – a burden or an opportunity?

Granted, the FCA rules have added to the regulatory toll for brokers, as they involve significant reporting and data processing. Forward-thinking brokers, however, should take advantage of this. If not, the costs of complying with FCA rules will become increasingly punitive as time goes by.

Brokers who look at automating and improving their processes with an end-to-end, cloud-based platform can massively reduce costs in the longer term. Not only that, but those brokers would also be able to prove their value to clients – an invaluable feature in a hard market.

Deploying a leading end-to-end software platform will reduce the manual processing associated with any kind of reporting. The platform automatically captures the data and surfaces relevant insights in real time. It also makes it simple to create bespoke reports for each client account, since it will automatically log every policy and resulting action. This enables brokers to track, report, and justify their remuneration because they can evidence the time and effort spent serving client needs.

Similarly, this allows brokers to monitor distribution channels, such as delegated authorities, binders or facilities. Brokers can audit these channels in real time, enabling them to assess the fairness of commissions or set fees for administration.

Becoming fitter and leaner

When game is scarce on the east African savannah, it is the lions who are leaner and fitter that have the advantage. It’s the same in business.

A modern cloud-based system helps brokers to benefit more widely from process efficiencies. Such a system reduces re-keying, automates common tasks, and captures meta-data to provide beneficial insights to the users.

Brokers need to think holistically about their future trading needs and consider using a platform that is evergreen and will not limit future innovation or growth. In other words, they need an agile and customisable platform that can scale with their business.

Growing the business by providing and proving value

Adopting such a system also acts as a catalyst for brokers to review the way they do business and where else they can improve efficiencies, generate more revenue, and grow the bottom line.

With cloud-native, data-driven insurance platforms (like Novidea’s Insurance Management Platform), for example, brokers such as Marsh, HIBL, Howden, and SRG have been able to get a 360-degree view of the customer and other stakeholders.

This enables full integration between customer-facing policy front-office transactions and the middle- and back-office with straight through processing. This means that brokers can extract more value from their customer and policy data with actionable intelligence from any device, anywhere.

Turning data into actionable insights. Enabling better-informed decisions. Delivering greater value through the selling of new products and services.

In a world that increasingly values value, doesn’t it make sense to be able to provide and prove it?

(First published by London Market Forum, February 2023)

Insurance in 2023: Our predictions for the year ahead

We’re almost at the end of the first month of the year! Time flies! And as we look ahead to the remainder of the year, it’s clear that the insurance industry is facing both challenges and opportunities. There are many trends that are poised to shape the industry in the coming year.

In this blog post, we’ll take a closer look at the top trends and predictions for the insurance industry in 2023, and explore how they are likely to impact brokers, insurers, and policyholders alike:

  1. Move to cloud-native – Hybrid working and broking-on-the-move have been a growing trend for the last few years, and digital ways of working are now expected, if not demanded by both employees and clients. Brokers need the ability to service clients seamlessly from anywhere, at any time, with access to all the data they need about clients, contracts, and carriers. We’ll see this continued growth over the next few years, but especially in 2023.
  2. Personalised pricing – Recent studies suggests that there will be large household premium increases over the next 12 months, as every facet of claims has become more expensive. Many insurers are struggling with how to price risk accurately to continue creating healthy ratios. We expect, however, to see market leaders moving towards personalised offers and pricing, based on more intelligent application of complex data.
  3. Increased adoption of IoT – 2022 saw a growing number of InsurTechs, insurers, and policyholders reaping the benefits of IoT, from flood forecasting to vehicle parametrics, to building construction data and the real-time reporting of this data. This will lead to further adoption of IoT across insurers and business lines. We expect this to continue growing with innovative new products using technology not traditionally associated with insurance, e.g. weather data and construction data used to improve efficiency in claim processing. 
  4. Maximising the value of existing customers – With increasing competition, rising costs of doing business, and cash-strapped customers, agencies, brokers, and MGAs will invest more on optimising their existing customer base, for example by offering multiple policy packages, more tailored services or cross- or upselling via the use of comparative customer data.
  5. The war for data talent – To maximise the value of data, businesses need top data analysts. As a result, the salaries of these specialists are rising and the marketplace is becoming intensely competitive. This is especially true because of the parallel rise in demand for the same skillset in financial services, retail, entertainment, and pharmaceuticals. In 2023, more insurance businesses will be competing for this limited talent pool, meaning we should expect to see salary costs increasing further. They will also need access to the latest tools and technologies. The companies that win the war for talent are likely to be those that invest wisely.
  6. Continued MGA expansion – We will start to see more businesses move into the MGA space in 2023. This could be accomplished by strategic acquisitions based on product and line of business synergies. Start-up MGAs are driving most of the future trends in insurance, and many agencies and brokers will build this type of growth into their business plans sooner rather than later.
  7. Increased collaboration between insurers and InsurTechs – 2022 saw Aviva and Lemonade’s unlikely partnership. It is yet to be seen if this is the start of a big new trend in 2023. Our hope, however, is that this competition will inspire more brokers to digitalise and adopt cloud-native platforms so they can compete more effectively with better on-demand customer service.
  8. Embedded Insurance – 2023 will see the continued rise of embedded insurance in e-commerce, led by Amazon. The e-retailing giant’s recent UK partnerships offering a range of policies to small and medium-sized businesses, backed by three insurers, is likely to pave the way for others. How many SMEs will switch to buying insurance via Amazon? Will Apple or Google enter the market next? 
  9. Global geo-politics will remain challenging – With no sign of the Ukraine war coming to an end, a potential economic slowdown in China, rising energy costs and ballooning inflation rates in many countries, all of this is having a knock-on effect on insurance businesses and their clients. We anticipate more economic turmoil and rising prices in 2023, meaning brokers, MGAs and agencies will need to keep tight hold of expenses and look to optimise margins where they can. 
  10. Regulation and change management – On 9th December, the UK government unveiled a detailed plan to reform 30 financial services regulations – including Solvency II and others that impact directly on insurance businesses. What the impact of this will be is yet to be seen, but we can expect a lot of change and increased costs for the market. Businesses that prepare with access to fast, accessible reporting to the FCA through enhanced Management Information and better use of data will come out on top. 
  11. Acceleration of digital transformation programs to survive and thrive – The insurance industry continued to evolve in 2022, increasingly adopting new technologies. It looks like our industry is reaching an inflection point, and we will see a real transformation in 2023 as forward-thinking companies look to increase efficiencies, drive down costs, and prove their value with better use of data.

As we progress through 2023, the way in which brokers, MGAs, and agencies to stay ahead of these trends and adapt to the changing landscape of the insurance industry will be critical. The efficiencies and improvements that come with technological advancements should be a high priority for those wanting to continue to flourish in these challenging times. To see how Novidea can help, click here.

How brokers are using tech to win the ‘FCA Fair Value’ war

When the FCA’s Fair Value reforms came into effect in January this year, the impact was, and still is, far reaching – much more so than many realised. However, the emphasis on brokers to show that they are providing Fair Value to customers is actually proving to be a benefit to some.

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Automated Workflows: 4 Tips to Help you Reap the Benefits

In a previous post, we looked at how automated workflows can transform your insurance business, which included a review of how insurance organisations can keep up with customer expectations while improving their team’s efficiency, effectiveness, and satisfaction. 

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