After placing 18th for business application growth in 2020, the insurance industry jumped 24% in 2021 to fourth place among major industries.
This data comes from the 2021 State of Swyft Industry Report. Consisting of compiled information from Swyft Filings’ new business applications across the U.S., the report shows a significant increase in insurance industry applications submitted.
The reasons for this increase in business formations are varied, with many fueled by technological and operational improvements in response to the pandemic. Insurance companies became more agile compared with previous years. This resulted in adopting systems that enabled companies to conduct business virtually—in some cases through AI and automation.
Technology Fuels Growth
In a Deloitte survey of senior U.S. insurance executives covering insurance companies’ current state of affairs, 52% of respondents trimmed discretionary spending in 2021 and earmarked savings for digitizing. 96% of respondents reported prioritizing digital transformation efforts and projects. The surveyed companies said prioritizing was necessary to support financial and operational stability, enhance efficiency and improve customer service.
Given the increased business made possible with the implementation of digitization, more entrepreneurs are choosing to enter the insurance field. Since early 2020, the industry has become digitized and entirely virtual in a way that would have taken several years to accomplish had there not been the pandemic. This nearly overnight transformation has made the field especially attractive to ambitious entrepreneurs.
Tech Trends Shaping the Insurance Landscape
Various tech trends are transforming the insurance industry, and their use will continue to fuel growth. These include applied artificial intelligence, automation and enhanced customer service.
Applied Artificial Intelligence
Applied artificial intelligence promises to transform the insurance business landscape as we know it. AI can discover solutions to complex insurance industry issues. The answers artificial intelligence gathers can be used to enhance operations and strengthen the industry as a whole. Those insurance companies implementing AI will become more diverse and understand what fuels customer needs and actions.
Businesses are also using AI for predictive analysis, which is helping in the development of insurance products. Companies with these enhanced products set themselves up to thrive.
Process automation is another tool increasingly being used by insurance companies. Automation technology improved significantly in many areas, including claims. Automated claims processing cut down associated costs in an industry segment that historically loses insurance companies money, saving substantial amounts in payroll and human error.
The use of pre-populated claim forms, for instance, is just one example of how automation improves the customer experience while saving the company money. Additionally, agents can now text customers updates, and electronic payments are the norm.
See also: Underwriting Small Business Post-COVID
Transforming the Face of Customer Service
Automation and AI have led to more than increased productivity and higher profit margins. These advanced tools are transforming the face of customer service. This occurred by allowing for more and higher-quality customer touchpoints.
Insurance carriers can respond to customer inquiries and concerns immediately and in real time. With chatbots and automated responses, customers can start a conversation until an agent or representative takes over. Technology fulfills a vital role in the customer service journey by providing quick answers to common questions.
AI also enables insurance personnel to access claims histories and distributions and respond to claims. While this is all occurring, the AI technology gathers data to help companies assist customers in the future.
New insurance business owners have an advantage over established company leaders. They can open their companies with all these digital and automated capabilities to set themselves up for success.
New Insurance Companies Primed for Growth in 2022
The increase in new business formations will likely continue in 2022 and beyond. With AI and automated technology now an integral part of the insurance industry, and customer expectations at an all-time high, we predict many new insurance companies will form over the coming months and years.
Providing companies remain focused on forwarding growth in the digital landscape; business formations are likely to continue to increase in future years.
Growth is also expected to continue in insurance business formations as companies balance AI and automation and human customer service.
While innovative technology like automated claims forms and chatbots are integral to ensuring that customers are quickly, efficiently and effectively attended to, it’s equally essential that human interaction occurs at strategic times throughout the process. New insurance companies that understand this have a good chance of thriving.