With the evolving innovation and rapid inclusion of digital transformation in the insurance industry, the sector is coming up with significant opportunities for its growth. The future of the insurance industry is quite promising, with many alterations in its regulatory framework.
Digitalization is stepping forward to make progressive changes in the way that the industry is conducting its business while increasing engagement with customers. The market size of the insurance sector is anticipated to reach near US$ 280 billion by 2020. The prediction also said that the market size of the life insurance industry, in particular, would increase by 14-15% yearly for the next 5 years.
So, how the insurance industry is looking at its future with digital inclusion? Well, let’s have a look.
It is getting more innovative than before
The insurance industry has seen a long and slow embracing of innovation since its inception. However, to cope up with today's digital economy, the need for innovation is surging high. And the good news is that the insurance industry is performing well in accepting these virtual innovations.
A boost in some digital-first insurers, creative startups, and tech giants has facilitated the shifting of the industry from its conservative path. And now, it is speedily traversing forward with the innovation-based digital culture.
The implementation of digital transformation in the insurance sector commences with a much newer outlook from an older system. With fast claiming, quality risk assessment, and hiked policy sales, the industry strives to witness a bright digital future.
The rising “headless tech”
Headless tech is an innovative idea that tends to work with effective and growth-oriented prospects. Headless tech refers to the concept that both the customer-facing and business-facing interfaces need to communicate along with the same information.
It must be optimized in a much unique way for handling respective tasks. And for doing so, the front-end must be designed for consumer presentation, combined with a top-notch back-end design for data functionality.
This growing trend of headless tech performs well with no-code tools and aids the optimization of the interfaces. In the coming future, it can be expected to see insurers implement separate customer-facing front-end and internal back-end processes to ensure a much steady data flow.
Growth of the hybrid cloud architecture
The hybrid cloud technologies prove to be a more innovative inclusion for bringing about digital transformation in the insurance world. It has nearly become the keystone of digitization for all industries and sectors.
What is more progressive about this technology is that the hybrid cloud market is expected to reach $128.01 billion by 2025, which had been only $45.7 billion in 2019. Several organizations, including insurance companies, tend to adopt hybrid cloud structures rapidly as they aim to reap the benefits of both individual and public clouds.
This emerging technology allows companies to switch between the cloud provider's toolkit and various other internal tools, adding more speed and flexibility in data operations.
A changing future with the power of InsurTech joint ventures
Forming partnerships in the insurance world is growing in a much rapid way. Collaborations between different tech and insurance companies are increasing with the changing trend to obtain a much winning proposition.
By tackling their legacy data and strengthening customer relationships, insurers can create more opportunities to establish many new revenue sources. InsurTechs tend to offer the sector every technological support necessary for extracting data insights from the existing customer relationships and facilitate more customization in the services with data-driven insurance policies.
Also, it is one of the most remarkable ways to maintain a much competitive edge in the growing insurance market.
Progressive growth in the insurance industry with high-end technologies is quite visible. Since the last two years, the inclusion and expansion of digitalization in the sector added more pace to its growth, delivering a more user-oriented service. And it is expected that with the adoption of more digital solutions, the insurance industry will develop a brighter future ahead.