Technology and prevention: the trends that will redefine insurance in 2023

Instability as the new normal. This is the mantra that is echoing through the offices of consulting firms and large corporations, and it illustrates the situation of constant change. Citizens and businesses have had to adapt over the past three years to meet the challenges generated by the pandemic, the war in Ukraine and its energy and economic consequences, as well as climate change. And the key to achieving this has been technological and cultural transformation.

This transformation has also reached the insurance industry, which is committed to leveraging the new opportunities arising from this situation. Adapting with agility and offering customers new formulas of protection will be key.

These scenarios are giving rise to the trends that will mark the world of insurance in 2023 and that point towards the areas of health, mobility, climate risks and cybersecurity, all of them areas targeted by MAPFRE Open Innovation (MOi) with its analysis and solutions. Prevention, tailored insurance and the use of new generation technologies – such as big data, artificial intelligence (AI) and the Internet of Things (IoT) –are gaining weight throughout the value chain.

Studies point to an expansion and improvement in coverage, which is gradually integrating mental health, telemedicine, and new technologies and devices aimed at streamlining the diagnosis and follow-up of patients.

There is a growing awareness of the risks that mental health problems pose to both the well-being of individuals and the stability of organizations. It has led to a 10% increase in the percentage of insurance companies including mental health services over the past year, according to Mercer Marsh Benefits (MMB) in the Global Insurer Survey Report.MMB Health Trends 2023. However, 16% of insurance companies do not offer any coverage of this type.

The majority (61%) include a maximum of ten psychological and/or psychiatric counseling sessions per year. Meanwhile, only 16% offer unlimited advice. Inpatient treatment is available in 53% of companies, and 40% also provide virtual counseling via videochat for monitoring anxiety or sadness

This last case exemplifies another major trend in healthcare, namely telemedicine. Services such as teleconferencing with the physician, which burst onto the scene with the pandemic, have become one of the most in-demand services in the last two years. According to MMB data, 77% of customers who used this type of care in 2020 want to continue to do so. As a result, 72% of insurers now include telemedicine for general health.

Savia, MAPFRE’s digital health platform, has continued to strengthen the emotional care of people following the launch of the psychology video consultation. It now also offers patients the possibility of segmenting their search by type of disorder with the aim of achieving more personalized and specific care of emotional health.

In addition, it has a corporate well-being model that responds to the need for companies to take care of their main capital, their employees, and which acts on two other pillars: nutritional health and physical health.

More and more of them have also innovated to reduce costs and provide customers with a better experience through new digital tools. Thus, one in four insurance companies already offers apps to suggest diagnoses for simple medical conditions and wearables for patients to self-manage their well-being.

The emergence of new, more sustainable and connected forms of transportation, such as personal mobility vehicles (PMVs), car sharing, driver assistance systems or mobility as a service, which combines shared mobility trends with public transportation, have given rise to a new insurance landscape, with formulas to ensure more flexible, immediate and personalized protection.

MAPFRE promotes sustainable mobility from the different facets that affect systems and services available to people. It has a Mobility Lab that is part of CESVIMAP that collaborates with startups, universities, research centers, car manufacturers and public administrations to anticipate the impact of new forms of mobility on the insurance sector and on society.

Recently, the Spanish Directorate General of Traffic (DGT) announced that soon “insurance will be mandatory for electric scooters”. The increase in incidents and the growth in the use of these vehicles has raised the alarm. Until recently, many household policies included coverage for cyclists and there are already insurance companies that have liability policies for owners and/or users of scooters, segways, hoverboards, bicycles and unicycles, the most widely used vehicles.

Also, the rise of the gig economy, driven by platforms such as Uber or Deliveroo, has generated a new type of self-employed worker, with more risks and less protection at work. This presents a clear business opportunity for insurance companies, who are now focused on offering policies tailored to the needs of these workers.

Technological innovation is also gaining importance. As mentioned by Andrew Rose, president of OnStar Insurance, to the consulting firm McKinsey’s magazine, “the vehicles of the future require the insurance of the future“. Thanks to technologies such as the Internet of Things (IoT) and through a simple app, insurance companies can obtain real-time data on drivers’ driving behavior and reward those with safe driving habits in their policies. In this way, policies are customized according to how well one drives, but also to how much the car is used: those who use the car the most pay the most.

Applications can also help to accurately assess accidents and deliver greater value to customers. Now installed in some corporate fleets, they are especially beneficial for organizations that are in the mobility and transportation business.

Climate risks are now becoming very significant. As the recent UN report Climate Change 2021: The Physical Science Basis warns, extreme weather events and natural disasters will affect the planet to an increasing extent. These will inevitably lead to human losses, but also to widespread harm to property and businesses. This is why insurance companies have already started to develop new solutions, using the latest technologies, to predict catastrophes, prevent risks, assess damages or process claims.

Thanks to a new digital ecosystem, which integrates sensor-based prediction systems, artificial intelligence (AI) and IoT, insurance companies can anticipate natural disasters based on real-time data, rather than historical information and weather patterns that no longer exist. This facilitates the prevention of risks or the calculation of losses that these events may generate.

Disaster monitoring is also being modernized through drones and other robotic imaging and video technologies, which facilitate the process of disaster inspection or flood visualization. The data they provide, processed through AI, enables streamlined crisis response and risk assessment.

And, if we go down to the user level, there are already many companies that offer apps to warn their customers of weather risks using geolocation technology, big data and AI. These applications also help foster safer and more sustainable behavior among customers.

Another trend that is emerging powerfully, in light of the increase in cyberattacks on companies, is cybersecurity, or how to defend computers, servers and other devices from malicious attacks. For this reason, the industry is expected to grow at an annual rate of 10% up to 2025, according to GlobalData.

As insurance expert Michael Jackowski states in Forbes magazine, “cybersecurity is no longer a technology risk, but a business risk.” This is why insurance companies are focusing their efforts on protecting companies through technologies and new products to prevent and manage threats.

Investment is increasing in technologies such as blockchain or artificial intelligence, which make it easier to detect failures and strengthen cyber protection systems. The same applies to partnerships with cybersecurity companies that can provide useful tools for analyzing potential risks. And the cost savings are not small change. According to IBM, companies that employ AI to detect cyberattacks and respond to data breaches save an average of 3 million dollars versus those that do not.

Beyond the technologies used, insurance companies are also innovating in the creation of solutions for the new work context and new cybercrimes. With more devices connected to networks and more people working from home, the problems of leaving the door open to a cyberattack multiply. Therefore, products and tools are being created that can protect company information in teleworking or hybrid work situations, and make workers aware of the need to be careful. These range from cyberattack coverage to human error protection, corporate impersonation or cyber extortion.

This last case has caused numerous headaches for both businesses and insurance companies in recent years, so new services are now available to cover ransomware or data theft crimes.

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