By Jonathan Phillips · February 08, 2022
5 minute read

Insuring a changing world: new products for new markets

Innovative Insurance

Insurance is being forced to keep pace with a changing world, and a new way of making products is needed. Jonathan Phillips looks at the future of the industry. 

Key takeaways 

  • The insurance industry is changing and new products are needed to meet new customer needs 
  • We believe a new platform is needed to accelerate getting new products to market when they’re needed 
  • To learn more about our Northstar insurance platform, book a demo. 

Our world is changing at an inexorable rate. The new ‘roaring twenties’, we might call it. This has brought the value of insurance products into sharp relief.  

On one hand, climate change is increasing the occurrence of natural disasters, like storms and floods. This means consumers and businesses are relying on insurance claims to help them rebuild.  

Meanwhile, COVID-19 and the related lockdowns and restrictions have altered the way we see our jobs and working patterns in the context of our family lives. This has changed the kind of cover we need. 

Travel has been paused by coronavirus restrictions, reducing the need for insurance. Yet, even when travel is an option again, will it be needed as often when we are all used to video calls? 

Elsewhere, despite the pandemic, medical technology is set to extend the life of new generations, bringing a new set of challenges. 

The impact of these events can’t be underestimated, but they merely accelerated a cultural and technological revolution that was already in progress. 

Let’s look at how each of these trends is impacting the insurance industry. 

As advances in medical science and lifestyle continue to improve the average longevity of the population, the consideration of income provision in later life becomes increasingly important. 

New vehicles mean new cover 

Changes to the ways we travel will continue as the range of mobility solutions available to us grows. Electric-powered vehicles, from scooters and bikes up to the rental of self-driving cars all present opportunities for insurance. 

When you’re renting a self-driving car for a single journey, what will accident cover look like? How will fault be determined if neither insured party was in control of the vehicle? The first to answer these questions stands to profit. 

Current events also increase the likelihood of short-notice changes to our plans, requiring more-flexible and extensive cover for events and travel.  

For example, a payment could be triggered automatically when a significant delay is announced on a flight your customers are taking, without them needing to notify you themselves.  

The payment could account for value-added services, like airport lounges or premium seating at busy airport restaurants. Perhaps you could even offer discounts or priority service through a partnership. 

Ultimately, technology now allows insurance to add more value in alleviating the trauma of an unplanned event as it occurs, rather than just paying the bill later on. 

The future of workplace insurance 

Turning to the future of work, the ways in which we derive income are also changing at pace. The rise of the ‘gig economy’ and flexible working patterns present opportunities for insurers. 

As the office disappears and is replaced by home working, so too will workplace insurance be replaced with home insurance policies that cover your work. The provision of laptops and other equipment to employee homes is now an essential part of hiring, so these items will need cover. 

Yet, permanent work itself is becoming less common. Research from Microsoft shows 41% of workers are thinking about quitting their jobs. As remote working makes job-switching easier, temporary and contract work will become more common. 

These opportunities cover the spectrum of insurance types, from property coverage for tradesperson tools, to health-related products for short-term income protection, and even micro-savings or pension products. As the workplace changes, so must workplace insurance. 

Medical science will let us live longer 

As advances in medical science and lifestyle continue to improve the average longevity of the population, the consideration of income provision in later life becomes increasingly important. 

Pre-2014 the ‘solutions’ available to retirees were limited: take some tax-free cash and use the rest to fund an annuity. Thankfully, that day has passed and the options available, combined with the evolving attitudes to flexible working at retirement, are growing. 

Keeping all of these examples in mind, it’s clear that one size will not fit all. It’s key for financial services providers to consider an individual’s situation with respect to pension savings, property (including lifetime mortgages), and other assets in the context of their health and aspirations in retirement will be key. 

Supporting each of these propositional areas, with everything from very micro-term products to long-term provisions will not be easy. 

How we can help 

That’s why it’s so exciting to be working with FintechOS. We may not have all of the answers to what the future holds for the insurance industry, but you could say we at least understand the ‘assignment’.  

While we can’t predict exactly what products will resonate with society going forward, understanding some of the drivers goes a long way. We know the challenges and opportunities facing insurance and we’re building a solution. 

The inherent need for flexibility to accommodate different routes to acquisition, product benefits, policy durations, payment types, distribution channels, servicing ecosystems, and claims automation, all have a part to play. 

The FintechOS platform can create and manage products across all these and many more rising areas. Whether out-the-box or easily put together with our low-code, self-service tools, our platform will let you get new products to a changing market faster than ever before. 

As the pace of change continues to increase, it’s the agility to meet the current needs of the market that’s the secret sauce of success. We think this makes FintechOS Northstar an essential tool for the future of the insurance industry. 

To find out more, get in touch. 

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About the author:
Jonathan Phillips is Sales Director for Insurance at FintechOS. He is based in the UK.
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