Financial literacy has taken significant strides following the economic crunch that the COVID19 pandemic brought on markets and households. In addition, after many people lost jobs, businesses, and even lives due to the virus outbreak, people are starting to realize the importance of being ready for life’s emergencies once more.
A study showed that Google Search traffic for “life insurance” jumped 50% between March and May 2020. Whether it’s pandemics or the rising costs of goods and services, factors affect people’s financial health all the time. For instance, people ask questions like “why has college become so expensive over the years?” or “why does money lose value to inflation annually?” We can wonder all we want, but there’s no stopping the rising education costs or the diminishing value of money.
That’s why people realize that insurance for protection and investment really matters. Times are changing, and the insurance industry is coming into more advancements to improve people’s quality of life.
Let’s look at the insurance industry trends 2022 will bring that show us that the future still looks bright amidst trying financial times.
Globally present assets
The rise of globalization and remote working has people moving to and from at a much larger rate. Accordingly, some people tend to buy assets from all around the world. Now, anyone can trade in any stock market regardless of their location. But this presents a more significant issue — the task of tracking these assets and keeping tabs.
One of the trends in the insurance industry has to do with data and security. We’re past a time that spreadsheets are the best ways to track assets and wealth, given that they post data privacy issues and the lack of automations. So with global assets now becoming the norm, insurance agencies and individuals who invest in them should start looking towards protection that covers a more global scope.
Digitization in estate planning and wealth protection
As more services digitize, there will be a mass digitization effort in the insurance market and beyond. For instance, people are now turning towards digital wills instead of physical ones as they are easier to update and store. Insurance companies are now also starting to digitize many aspects of their operations, including application and claims.
Accordingly, financial advisors must now operate with technology in mind. We can no longer serve clients without a basic to moderate understanding of how technologies like cloud computing, artificial intelligence, KYC, and many others work. There are no longer any major insurance companies that don’t have some form of digitization in their workflow. And with time, that digital transformation will only keep growing.
Automations for faster claims
And speaking of artificial intelligence, people will be seeing more automations and computer learning in the insurance industry over the next few years. We’re even starting to see so much of it now. So, for example, people who want to learn how to protect their personal finances can now turn to online assessments that help compute what life and non-life policies they’ll need to protect their assets, loved ones, and themselves.
Some of the current trends in the insurance industry also point towards an increase in AI applications in customer retention and support. Another instance of automations is how advisors and companies now use chatbots to tend to people’s frequently asked questions, further pushing financial education to a new limit.
Rising financial literacy
One of the best developments over the years is the overall growth of financial education and literacy. Governments are starting to realize how crucial financial education is. Many of them have started public education programs, and financial coaching is augmenting that effort.
What institutions in financial education should now do is a shift from awareness building to application. Lessons should focus on more case-specific scenarios like how to protect your family with life insurance with blended homes or how to choose a life insurance provider that will cover someone who telecommutes or moves from one country to another frequently.
Blockchain in the insurance industry
Blockchain technology explicitly provides insurance companies with a more secure means of managing data across multiple interfaces. The peer-to-peer approach to decentralized information gives institutions more integrity in identity management and claims processing. Fraud management teams and underwriters should start looking at blockchain technology as a means to verify the information. Using these smart contracts will help insurance companies reduce operational costs while also improving processing speed on the side of policyholders.
Conclusion: The Importance of Protection
There’s now a lot of talk about blockchain and how it will forever change financial institutions like banks and insurance companies. But, instead of treating blockchain as an enemy, some of the leading finance companies are viewing the technology as an opportunity to improve their services and operations.
All that is to say, life insurance benefits and fast-changing digitization are pushing people towards more financial protection. The global life insurance market is expected to hit a valuation of $2.88 trillion by the end of 2021, with a 16.3% annual growth rate. At that momentum, more people will start experiencing more peace of mind and financial security with better policies and more efficient execution through the power of technology.