The year 2023 will be the year of automation, Sollers Consulting highlights in a new report. Economic pressures will force the industry to shift to more efficient business models. The ability to leverage technology will become the key differentiator.
With the return of inflation, insurers face challenges they haven’t faced in decades. Three main factors will force insurers to improve their operations and streamline their business processes. The first factor is claims inflation, the second is increased financial pressure due to natural catastrophes and higher reinsurance costs. The third factor is lower premium revenue growth prospects, predicts business and IT consultancy Sollers Consulting in its new report, “Navigating Through Stormy Times – Insurance markets and technology in 2023.” Sollers’ predictions are based on economic data and management insights gained through conversations with insurance industry executives.
“Inflation is impacting the industry on a scale not seen in a long time. It is not only affecting claims costs, but also the cost of doing business,” says Wojciech Korobacz, lead consultant at Sollers. “In addition, financial pressures are increasing due to the growing frequency of natural disasters and rising reinsurance prices.”
With consumer prices rising faster than in the European Union, U.K. insurers continue to focus on cost efficiency. Claims inflation and rising reinsurance costs continue to be a major challenge for the industry.
“To achieve higher levels of automation, insurers will continue to modernize their core systems, focusing on claims processing. Cloud and cloud-based systems will become more important to better support automation efforts,” comments Luiza Kulisiewicz, consultant at Sollers.
Supported by a tough market, the London market and Lloyd’s will attract more players. Merger and acquisition activity is expected to increase as the gap between progressive companies and less successful insurers widens.
“Data and data management will be the dominant area of activity in the London market,” Korobacz says. “The efforts made between now and 2022 will result in a big leap toward a data-driven business.”
According to a report from Sollers, core systems modernization continues to play an essential role in supporting data-driven business models and process automation. Lloyd’s Blueprint 2 modernization plan will drive companies to adapt and transform to take advantage of the opportunities presented by the digitization of market services.
Download the full report here: https://sollers.eu/insights/predictions-2023-report/