As leaders and observers gather predictions from various industries for the upcoming year, P&C insurance may seem easy to overlook. Risk aversion in the industry’s DNA. Typically, the only time we experience substantial change is when substantial change forces our hand. There are no “flying car” predictions to be found in insurance...until flying cars need to be insured.
That said, 2022 could be the year a number of economic and environmental factors move the industry in new and potentially profound ways.
Appropriately enough, the biggest trend for 2022 starts with a famous influencer.
#1: Usage-based insurance is on the way...because Elon Musk says so
This year, Tesla expanded its car insurance offering into Texas. Rather than take their California offering into another market, they are leveraging their innovative technology (and the state’s regulatory leeway) to create a pricing model unlike any other insurer at the moment.
Tesla’s auto insurance in Texas, offered to drivers of specific Tesla models, bases its premium entirely on a driver’s “safety score,” an AI grading system based on five key safety indicators.
Unlike the automotive industry, which Tesla has been dragging toward electric vehicles by increasing consumer demand, the insurance industry would seem more than happy to explore the user-based model Tesla is leading.
Elon Musk’s involvement all but guarantees usage-based insurance will continue to grow.
#2: Mobile capabilities will increase
Like businesses across many industries, insurance companies saw a wave of consumer adoption of digital tools during the COVID-19 pandemic. The mobilization will continue in 2022 and beyond, based both on the desires of consumers, as well as the ability to keep adjusters out of harm's way.
One impact of climate change has been an increase in catastrophic weather events. When those events happen, insurance companies get called to step up. Greater mobile capabilities gives companies the ability to serve their customers quickly, while saving them from having to send their adjusters into volatile situations.
#3: Auto insurance is going to get electric
While 2022 may not be the year flying cars require insurance, there are plenty of other automotive developments that will.
As the major auto manufacturers catch up to Tesla (stop me if you heard that before), auto insurers will need to address the rising popularity of electric vehicles.
When Chevy recalled the Bolt due to numerous battery fires, it shined a light on why insurers have been understandably nervous about the electric vehicle market. Nevertheless, the industry is moving in that direction, meaning insurers will have to decide how to go with them. Expect to see big decisions made in the coming year.
The amount of progress made in each of these areas will likely vary, but I look for all the big players in P&C insurance to at least move forward in all areas. When it’s all said and done, I think there’s a real chance the companies who lead the industry a decade from now could look at 2022 as the year they set themselves up for success and differentiated themselves from the competition.
Ready to build your roadmap for success in 2022?
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