Realistic Expectations for Insurance in 2020

Thinking about insurance industry trends for the next year was always a fun exercise whether I was at the META Group, Financial Insights (IDC) or Ovum (now Informa Tech, I believe). Each trend captured the opinions from our team of technology-focused insurance industry analysts concerning what we thought would occur over three to five-plus years for each specific issue. Once the trends were finalized by the team, our trend report drove a significant part of our research agenda for the following year. Instead of trends, I decided to publish my realistic expectations for the 2020 insurance industry:

1. The League Tables (ranking of insurance carriers) for each major insurance line of business will look the same at the end of 2020 as the tables look at the end of 2019.
2. There will continue not to be any (statistical or otherwise meaningful) correlation between investment levels in startup insurance firms and any measurable impacts on incumbent insurance firms specifically or the insurance industry generally. (Hype does not equal reality regardless of how much PR digital ink is spewed by the startups!)
3. Insurance firms will continue in their grand tradition of exhibiting "magic bullet" syndrome: believing that the latest technology or technology application can resolve their major business objectives and can be implemented by using minimal company resources.
4. Insurance firms, particularly in the U.S. and Europe, will continue to struggle to rationalize the large multiplicity of each of their core administration systems (i.e. policy administration, billing, claims management systems).
5. Independent agencies (and broker firms) will continue to sub-optimize their operations by not acting in the reality that they are joined at the hip with each of the carriers they conduct business with.
6. Although insurance firms will continue to recognize the absolute criticality of data, the firms’ various data elements will collectively behave more like useless sludge than a clean and useful resource.
7. The lack of clean, standardized data will continue to hinder (stop?) insurers from successfully deploying customer-facing (and other market-facing, including producer-channel-supporting) initiatives.
8. Most insurers will continue to give lip service to providing world-class customer service.
9. The number of independent insurance agencies and insurance broker firms will continue to decrease as M&A continues in the producer channel, but the number of agents/brokers will remain stable.
10. 5G, immersion technologies (AR and VR) and enterprise streaming will join the never-ending parade of technologies/technology applications in 2020, already chockablock with other "supposed insurance firm immediately must haves" that include leveraging social media, offering increased functionality on mobile devices, virtual agents/chatbots, interactive video for client onboarding and customer service, IoT, big data, cognitive computing, deep learning and machine learning – all of which technology firms will use as door openers as they reach out to insurance CIOs and CTOs.
11. Cyber risks will continue to cascade through any device connected to the Web used, owned, leased or otherwise in the possession of society (families, individuals, businesses, federal/state/local governments and the military) adding more pressure on insurers to decide whether or how to profitably offer protection or services.
12. I’ll continue to hope, in vain, that increasingly more insurance firms will realize the importance of using geospatial solutions as critical components of decision-making, whether the geospatial data comes from terrestrial or Earth Observation sources.

See also: Are You Ready to Fail in 2020?