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Non-Life Insurance Sector Scorecard – Thematic Research

COVID-19 is by far the most important theme in the insurance market going into 2022. It has put great strain on economies around the world and will be a key factor in the underwriting process for the majority of products. Even as countries emerged from lockdowns throughout 2021, uncertainty remained: gross written premium prices saw significant rises in a range of lines as an increased risk had to be priced in.

Other themes remain key for insurers despite the presence of COVID-19. Notably, environmental, social, and governance (ESG) remains essential to insurers going forward. The increase in severe weather events around the world has illustrated how important it is to combat climate change, while the general public has become increasingly intolerant of unsustainable businesses. Key technology themes, such as AI and personalization, will also help insurers to adapt to the post-COVID19 world and offer customers the end-to-end digital service they now come to expect from their service providers. Insurtech is also considered one of our key themes to look out for.

What are the market dynamics of non-life insurance market?

The non-life insurance industry has enabled the global economy to develop exponentially in the last two centuries and as a result, continues to enable the day-to-day operations of businesses and consumer activity. Technological developments are enabling the industry to become increasingly efficient in its operations and develop new products across life and non-life insurance markets. With customers demanding a more agile and personalized insurance experience, providers must be at the forefront of adoption, or they will be faced with the prospect of a shrinking customer base. Insurers have faced the challenge of losing customers in commercial and personal insurance due to falling disposable incomes and delayed renewals through lockdowns, with many having to increase prices just to cover their risk. Furthermore, the low-interest environment across the world means they face extra pressure to make a profit through underwriting.

What are the key themes in the non-life insurance market?

COVID-19: The spread of COVID-19 will remain the most disruptive theme affecting the insurance industry, with the level of risk still very high across a range of lines, which leads to increased cost of claims. The insurance industry has been hit on two main fronts, the first being from the cost of claims due either directly to COVID-19 in the commercial space especially, or indirectly through government lockdown measures. Insurers have also been impacted by increased volatility in financial markets and record-low interest rates, which have resulted in a decline in the value of their assets and increased solvency pressures in some instances.

ESG: ESG is a key issue in insurance both for public relations and its future profitability. Insurance is one of the leading industries in the global economy and therefore needs to be seen as a leader in the key issues within ESG, such as sustainability and, ultimately, climate change. The insurance industry will take a leading role in ensuring sustainability targets are achie

Insurtech: Insurtech has grown from operating in niche areas of the insurance industry to reimagining products in core lines of business and growing to a size to be considered competitors with some of the largest incumbents. In order for an insurtech to become a leader in a given market, it must become a reputable name that policyholders trust to payout should they need to claim.

AI: AI and machine learning are being leveraged across the insurance value chain. Some of the biggest immediate use cases for the technology are in the claims management area of the value chain, where AI is being applied to improve the detection of fraudulent claims. COVID-19 in particular has made the need for making processes more efficient through automation, machine learning, and AI.

Personalization: Customer purchasing behavior is driving a need for more tailored products that meet both the individual’s needs and risks. Insurance products are becoming less standardized and increasingly bespoke to target specific audiences. The personalization of policies will be a huge turning point for the insurance industry, as underwriting accuracy will increase dramatically, and providers will be better placed to assess risks.

Internet of Things (IoT): The IoT is among the most disruptive technologies in the insurance sector. It has the potential to redefine the traditional insurance business model, shifting the focus from mere protection to prevention. The IoT will create considerable opportunities for the insurance industry to access large amounts of policyholder data to assess their level of risk and adjust premiums accordingly.

Demographics: Insurers need to understand in detail the trends and dynamics of global populations in order to provide adequate risk recovery solutions. Different demographics have developed different expectations when it comes to their insurance policies. One way that insurers will look to adjust quickly to changing demographic trends is to partner with insurtech and specialize in policies developed for these niches.

Emerging Economies: Advanced economies globally have been lagging behind emerging economies in terms of GDP growth rates; as a result, emerging economies present a considerable opportunity for insurance providers to grow their business considerably. Commercial insurance lines are an obvious opportunity as businesses begin to engage in international trade and the need for insurance products increases dramatically.

Cyber Insurance: The cyber insurance market had previously been restricted to technology companies and the North American region. However, the market has grown rapidly, with policyholders from varying industries and regions seeking cover.

Computer Vision: The ability to assess claims through image recognition technology has the potential to streamline the claims process and decrease the time from the first notification of loss to settlement in many markets. The use of computer vision technology will benefit providers operating in numerous markets, in particular affecting the claims management area of the value chain.

Market report scope

Key Themes COVID-19, environmental, social, and governance (ESG), insurtech, artificial intelligence, personalization, internet of things (IoT), demographics, emerging economies, cyber insurance, computer vision

Scope

  • COVID-19 is by far the most important theme in the insurance market going into 2022. It has put great strain on economies around the world and will be a key factor in the underwriting process for the majority of products. Even as countries emerged from lockdowns throughout 2021, uncertainty remained.
  • Insurers have faced the challenge of losing customers in commercial and personal insurance due to falling disposable incomes and delayed renewals through lockdowns, with many having to increase prices just to cover their risk. Furthermore, the low-interest environment across the world means they face extra pressure to make a profit through underwriting.
  • Other themes remain key for insurers despite the presence of COVID-19. Notably, environmental, social, and governance (ESG) remains essential to insurers going forward. The increase in severe weather events around the world has illustrated how important it is to combat climate change, while the general public has become increasingly intolerant of unsustainable businesses

Reasons to Buy

  • Benchmark yourself against the rest of the market.
  • Discover the market leaders across 10 essential themes to non-life insurance.
  • Discover what the 10 key themes are and understand why we believe them to be so crucial.

Key Players

Admiral, Ageas, AIA, Allianz, Allstate, Aon, Arthur J Gallagher, Assicurazioni Generali, Aviva, AXA, Bought By Many, By Miles, Chubb, Covea, Cuvva, Direct Line, Hiscox, Insurance Australia Group, Lemonade, Marsh & McLennan, Marshmallow, Metromile, Munich Re, Next Insurance, PICC, Ping An, Policygenius, Progressive, Prudential, Root Insurance, RSA, Suncorp, Swiss Re, Tapoly, Tokio Marine, Travelers, Zego, Zurich

Table of Contents

Executive Summary

Introduction

Theme map

Themes

Sector Scorecard: Non-life Insurance

Who’s who

Thematic screen

Valuation screen

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Frequently Asked Questions

The key themes in non-life insurance include COVID-19, Environmental, social, and governance (ESG), insurtech, artificial intelligence, personalization, internet of things (IoT), demographics, emerging economies, cyber insurance, and computer vision.

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