Data and analytics firm GlobalData expects COVID-19 to be far and away the most important theme for the insurance industry in 2021, but that sustainability will continue to be an essential long-term issue.
GlobalData insurance analyst Ben Carey-Evans states COVID-19 will change markets and transform consumer behavior as consumers and businesses continue to become more risk-averse post-pandemic.
Furthermore, when it comes to returning to travel, he believes they will be wary and are more likely to take out new insurance policies.
“Lines such as business interruption and travel, which have seen high levels of disruption, should see penetration rates rise as people will want to make sure they are fully covered.”
“Sustainability will also be a key theme throughout 2021 and insurers should continue to prioritize this theme despite how difficult it is likely to be.
“While there could be a temptation to relax targets following a difficult 2020 and what looks to be a challenging 2021, the long-term impact of climate change will have a far more severe impact on the insurance industry, as we see more significant weather incidents and people increasingly look to avoid unsustainable businesses.”
Cybersecurity is also underlined in the report as an issue that continues to grow in prominence as a result of an increasingly digitised world.
GlobalData states that this issue has also become more topical due to COVID-19, as employees around the world continue to work from home, which has encouraged attempts at fraud pick-up
“The impact that COVID-19 has had on these themes will shape their evolution in the coming years, which is what makes it clearly the standout theme in 2021,” Carey-Evans adds.
“It is a very interesting time for insurance, as the pandemic will have more of a transformative impact on the industry than any one event in previous history.
“The sudden changes to consumer and employee behavior will completely change how many products need to be packaged, managed and sold. It also does not appear as though old habits will immediately return once the pandemic ends.”