2021 has been another busy year in the risk and insurance business. Let’s review insurance industry trends, key activities, and more as we look back at the year.
After reflecting on this past year, make sure to spend some time setting new goals for 2022. Think ahead about how to reach your goals and be successful — try our goal-setting tips for more help!
Read on to learn more about 2021 insurance industry trends, significant actions, and key lessons learned in this challenging year.
Significant 2021 Insurance Industry Trends
2021 brought new challenges and opportunities.
Digital continues to be a key driver.
Carriers, agencies, and brokers continued their digital transformations in 2021. Many partnered with major players, like Guidewire and others, to drive their innovations. Others worked with technology firms in-house to keep expenses lower. The goals of the technology innovations have been to increase efficiencies, lower costs, and improve the customer experience.
Working from home drove innovation.
Many people have shifted comfortably to working from home fully. Others have returned to the office on a part-time or limited basis. The need to keep entire workforces at home longer than expected drove innovation in 2021. Zoom happy hours that began in the early days of the pandemic may have continued — but we’ve found other ways to stay connected. Technology continues to get better at meeting our needs, and one new need is a streamlined, connected, remote workforce.
Insurtechs collaborated or competed with traditional carriers.
The future of insurance is moving at a rapid pace. Changes to traditional workflows and processes reduced cycle time and made things easier for customers and employees. We continued to see startup incubators inside major carriers and smaller insurtechs providing solutions.
Mergers and acquisitions activity intensified.
Lower interest rates in 2021 drove higher rates of mergers and acquisitions. Changing market conditions through M&A activity tends to disrupt the industry as goals, strategies, and employees shift. An interesting insurtech move in the M&A space in 2021 was digital tech company Lemonade acquiring usage-based auto insurer Metromile.
Companies invested in ESG.
Environmental, social, and governance (ESG) issues are top of mind for many carriers and other businesses. ESG issues include things like supply chain management, labor practices, environmental concerns, and more. Businesses of all sizes became more aware of their ESG records — and more invested in improving them in 2021. This looks to be a trend that will continue.
Lessons Learned in 2021
We’ve learned some things from insurance industry trends in 2021 to carry forward in the new year:
1. The pace of change is accelerating.
An important emerging skill for everyone in the workplace is change management. Change has always been a constant, but the pace of change is quickening – and the people and businesses who can adapt quickly will be successful.
2. Digital is here to stay.
This isn’t a surprise – digitization is here to stay. Invest in technology designed to create efficiencies, eliminate roadblocks, and improve the customer journey. Policyholders expect a seamless digital experience and will go to the agent who can provide it.
3. Opportunities come from change.
The increased merger and acquisition activity creates opportunities for agents and brokers. New products, territories, and writing companies come from the movement of companies and people. This change creates new opportunities that didn’t exist before.
4. Cybersecurity issues rose to the top.
Cyberattacks have been on the rise. 2021 was a busy year for phishing attempts, malware, and ransomware. High-profile cyber incidents like the Colonial Pipeline ransomware attack drove the public’s perception of the need for cyber protection. Even insurance companies weren’t immune, with both AXA and CNA suffering breaches in 2021. We learned the importance of both cyber insurance and sound risk management.
5. Customers want to work with companies with solid ESG records.
Previously called corporate social responsibility, this simply means more customers want to do business with partners who care about the world we live in. Companies who invest in ESG can expect to see more policyholders and customers who care about these issues.
Looking Ahead to 2022
2022 should be another interesting year in insurance! Stay on top of upcoming insurance industry trends and key actions by becoming a member of the American Agents Alliance. Invest in yourself and your business!
Whatever the trends are, industry education and great networking are always in style – and you’ll get the best of both with a membership with the American Agents Alliance. See for yourself how we empower independent agents and brokers to thrive.