Unlocking Innovation: How Technology is Revolutionizing the Insurance Value Chain

Technology is changing the insurance world in a big way. It’s breaking down old barriers in underwriting, claims management, and how insurance is distributed. The days of isolated systems and slow, manual processes are fading. This year, we’re witnessing a record amount of insurance being sold by brands that aren’t traditionally in the insurance business. This shift is happening because of innovation and a growing demand for better solutions.

Right now, embedded insurance makes up about 3% to 5% of the global insurance market. That’s around $213-355 billion! Insurers believe this could jump to 15%—about $1.1 trillion—by 2033. This growth is fueled by the trend of including insurance in everyday purchases, like travel insurance when booking a trip or device protection with a new phone. For instance, BMW Financial Services manages over 4 million insurance policies, and Volkswagen Financial Services has about 6 million. This trend is reshaping how consumers access insurance, with non-insurance brands taking center stage.

Delegated authority distribution is also on the rise. Analysis from Oxbow Partners shows that this segment has more than doubled, from £10.4 billion in 2018 to £22.1 billion in 2023 in the Lloyd’s market. It now accounts for over 40% of total premiums and is expected to exceed 45% by 2027.

But there’s much more to explore than just embedded insurance. The digital distribution of insurance is expanding with new ideas like omni-channel experiences. Retailers and service providers are now using low-code platforms and API-first designs to quickly deliver custom insurance products. By 2025, these changes could fundamentally alter the insurance landscape.

Breaking Down Barriers in Delegated Authority

Delegated authority has long been known for its complexity. Old systems and manual work stymie efficiency. Thankfully, technology is changing that. Innovative platforms are helping managing general agents (MGAs) and brokers work more smoothly with insurers. This is especially important for partnerships that need fast results.

In the future, coverholders will act as digital connections for underwriters, creating smooth experiences from brokers to insurance providers. This change allows for real-time monitoring of portfolios, reducing volatility and costs. Customers will see improvements in claims management as well, with quicker processing times and clearer communication. Simple claims can be settled in hours instead of days. This efficiency not only trims administrative costs but also boosts customer satisfaction—an essential factor in today’s competitive market.

When it comes to underwriters and other interested parties, better data quality is a game changer. With accurate, real-time data, everyone can make faster and smarter decisions throughout the insurance process.

Embracing Low-Code and API Solutions

Low-code platforms and API-driven solutions are revolutionizing how insurance products are created and sold. They make it easier for product teams to design and deploy solutions without needing extensive technical skills. This cuts development costs and speeds up deployment for insurers and opens doors for non-insurance brands to contribute to the insurance value chain.

This shift leads to widespread innovation. By 2025, we’ll see more self-sufficient teams in insurance companies that can quickly meet market demands with tailored products.

Meeting Consumer Expectations with Omni-Channel Experiences

Today’s consumers want convenience and personalization. Omni-channel distribution is essential. Modern insurance platforms are allowing customers to interact with providers through various mediums—online, mobile, or in-store. This multitude of options improves user experience and helps brands understand consumer behavior.

Corporate partners are also benefiting. They can link front-end systems with robust back-end platforms to offer unique insurance products that match their brand identities. This results in both insurers and non-insurance brands finding new ways to stand out in a crowded market.

Looking Ahead to 2025 and Beyond

As we move forward, the lines between insurers and non-insurance brands will continue to blur. Technology is fostering collaboration and growth. Stakeholders in the insurance industry now have the tools to think creatively, respond swiftly, and use accurate data like never before.

By 2025, the fusion of digital innovations, changes in delegated authority, and omni-channel experiences will significantly reshape the market. We can expect more insurance sold by non-traditional brands, with an emphasis on simplifying processes and improving customer experiences. To thrive in this new landscape, having a solid strategy backed by effective technology is crucial. Those who adapt will lead the industry into a new era of efficiency and customer satisfaction.