As the pandemic lingers, it’s having a lasting economic impact on the insurance industry and so many others.
Insurance companies saw losses in key industry areas, particularly property-casualty underwriting. Reported insurance industry trends going into this year include a continued dip in property-casualty underwriting due to extensive job losses, and bankruptcies affecting small business premiums as companies in retail, food service, and personal services struggle to recover or shut their doors. The global event cancellation market – which saw average annual premiums of $500-600 million pre-COVID – could face losses as high as $6 billion due to the pandemic.
Deloitte’s US premium projection suggests volume may not return to pre-pandemic levels until after the fourth quarter of 2022.
With nonlife premiums projected to come out of a flattened line and into about 3% growth this year, according to Deloitte, flexibility and streamlining are key for staying solvent as the insurance industry rebounds and starts trending toward growth.
How will this impact your company’s operations and long-term planning? Here are three important insurance industry trends and the key takeaways from each.
Insurance industry trends impacting your company
1. Re-evaluating real estate to optimize costs
Optimizing expense management remains critical to insurance company operations. This not only mitigates losses from reductions in premiums, refunds, and claims payouts enhanced by the pandemic, but also frees up capital to encourage future growth and innovation.
In Deloitte’s 2021 insurance industry outlook survey, 61% of survey respondents expect to cut costs between 11% and 20% over 2021 and into 2022. Re-evaluating space utilization for the hybrid workplace is one way to save on real estate costs.
Research shows most commercial buildings were unoccupied 30% to 40% of the time before the pandemic, leading to substantial waste.
Now, with more employees working remotely at least part of the time, your company could achieve significant savings by adopting more flexible seating arrangements.
Space management software gives you full visibility into your available real estate for every building, floor, and department. You can reconfigure your floor plans to accommodate new ways of working, such as converting underutilized private offices into reservable rooms or converting large conference rooms into huddle areas for more spontaneous collaboration. You can also move away from assigned seats and make workspaces reservable with desk hoteling software, allowing you to get more use out of every space.
You can even use occupancy sensors to get real-time insights into how employees use your office space so you can optimize cleaning schedules and better plan for your future needs.
This doesn’t need to be a cost cutting across the board, but rather a re-evaluation of spending priorities. A trend for cost management in the insurance industry as a whole is to free up funds for future innovation and growth.
2. Restructuring companies and teams
Few companies, if any, are coming out of the pandemic unchanged. Your insurance company may be working through a merger, downsizing, or even adding more employees.
That could mean an office relocation, reconfiguration, or renovation is on the horizon.
Move management software makes it easy to plan and execute these changes.
Research also indicates the pandemic may jump-start new types of insurance coverage, like parametric policies that pay after a triggering event, rather than a specific property loss claim. Parametric policies would come into play in instances such as business interruption for companies experiencing IT disruption due to a specific catastrophic event like a global outbreak, an initiative already offered by Lloyd’s of London’s Parametrix Insurance. Other innovation could come from the development of new products for individuals spurred by changes in driving habits and work environments as more employees decrease driving and work from home, with hybrid and remote work schedules becoming the norm.
The advent of new insurance products may result in restructuring teams within your company. This could mean rethinking traditional department boundaries in favor of cross-functional office neighborhoods.
3. An increased focus on the hybrid employee experience
Approximately 60% of insurers who responded to Deloitte’s Center for Financial Services global survey reported their companies had seen furloughs and layoffs.
Half also experienced reductions in pay or freezes on promotions.
At the same time, employees across industries are leaving their jobs in record numbers.
To keep their best people engaged, insurance companies will double down on initiatives to improve the employee experience. This means rethinking their office design, implementing more flexible workplace policies, and introducing new technology to keep their teams safe and connected in a hybrid environment.
Employee health and wellness are ongoing concerns for many, along with childcare.
Nearly three-fourths of survey respondents said employee fears about COVID hindered their return-to-office plans.
Employers need to take these concerns seriously, starting with office protocol that includes wellness screening, continued social distancing, and contact tracing.
In the absence of assigned seats, employees need to be able to find their colleagues quickly, reserve a room or desk near them, and check in clients or consultants who may be coming to see them that day.
Mobile technology makes it easy for employees to navigate their new office and find everything they need to be productive.
These solutions are part of a larger insurance industry trend toward digital transformation. In fact, 95% of insurance leaders said they were accelerating digital transformation after the pandemic revealed gaps in their company’s technology.
Embrace the future with agile workplace technology
Maintaining a competitive edge amid these massive insurance industry trends requires smart strategies and smart technology. iOFFICE + SpaceIQ has the most comprehensive portfolio of solutions to help your company manage your workplaces, protect your workforce, and enhance your employee experience. Facilities leaders can see their entire real estate portfolio at a glance and drill down to specific details for every building, floor, and room. They can use sensors to capture space utilization data and display it directly in their digital floor plans. And they can plan moves, keep track of assets, schedule cleaning and maintenance, and gather the insights they need to make better decisions.
Employees can also use the Hummingbird mobile app to find people and places, reserve rooms or desks, request service, and receive mail, visitors, or information.
As they use this technology, they are also generating valuable insights you can use to better plan for a changing future.
Download our guide to learn more about how our solutions help you adapt to insurance industry trends and drive innovative growth.