Change is being driven by consumer demand, whether it’s for digital services, convenience or sustainable offerings, according to Krista Griggs, Head of Financial Services and Insurance at Fujitsu UK & Ireland.
“Insurance organisations could never have predicted the rippling impact it would have, but as the industry recovers and as we propel into 2022, digital adoption is no longer an option but a forgone conclusion,” she said.
“In fact, earlier this year ISG reported that 90% of insurers expect digital transformation to accelerate in the sector.”
In reaction to this change in consumerism, Griggs believes that insurers will need to explore a wealth of different avenues in the coming year to competitively provide and offer the right services and products.
As the industry faces major disruption and innovation, she shared her predictions for the coming year within the insurance sector.
Griggs said that it’s not just large financial services institutions that have a role to play when it comes to environmental, social and governance (ESG) concerns as insurers also have a responsibility to ensure it protects the earth.
She noted: “Generation Z has already demonstrated loud and clear that they are increasingly prepared to avoid unsustainable brands, and in many cases they are willing to pay a premium for sustainable services; what’s more, the reputational damage of not addressing sustainability is now too great to ignore.”
Griggs expects that carbon will become a tradeable commodity and insurance companies must prepare themselves for this shift.
“Implementing sustainability-related disclosures, standards and creating a carbon-neutral business model is a start, but insurers can go further. They will be increasingly looked upon when it comes to helping businesses, individuals and even specific regions navigate climate change.”
Following the rise of natural disasters, such as floods and forest fires, the industry should expect an increasing response from insurers to predict and prevent, as they have a plethora of data available that they can use to spot trends.
“This could lead to more investment in technologies such as earth observability and drones to identify potential imminent losses, as well as provide alerts to limit and even prevent losses from occurring in the first place,” she said.
“Not only that, it allows for much better collaboration with governments, helping to further access climate change’s impacts.”
Griggs has also predicted that AI will become a mainstream capability to deliver personalised services as the scope of it in the insurance industry is broadening and diversifying.
Insurers are currently using it in a wide range of business streams, from pricing to risk calculations and fraud detection to personalised offerings.
She explained that in December, the UK government’s Centre for Data Ethics and Innovation (CDEI) published a roadmap setting out the steps required to build a world-leading AI assurance ecosystem.
“Therefore, when developing these digital services, it’s essential that insurers decisions can be explainable.
“Unconscious bias will creep into AI if the algorithms are set up by a narrow group of people. It’s here that a lack of diversity among data scientists, i.e. the experts that develop and test these AI systems, can reinforce further unconscious bias.
“In order to retain trust in the services and insurers, 2022 will be about consciously building solutions that proactively look out for these biases and prevent them from manifesting,” Griggs concluded.
