3rd December 2023
Majesco has announced the availability of a new thought leadership report, "10 Trends Shaping the Future of Insurance in 2024". This new report takes a detailed look at the top-of-mind issues insurers are facing as they look ahead to the upcoming year, including a need for a change in mindset–moving beyond a legacy, internal view to one recognising a world of continuous change that demands new technology and operating model as a foundation to adapt, innovate and deliver at speed as markets shift and change continues its relentless path forward.
Looking toward 2024, the insurance industry will continue to face these challenging market economics, which will continue to impact overall operations. The insurance market is facing many headwinds, driven by heightened volatility in financial markets, heightened customer expectations, economic activity, and increased risk environment. Navigating this uncertainty is not for the faint of heart. It requires leaders to diligently execute their strategy and adapt where they need to remain relevant and competitive in this fast-changing market landscape. For insurers to remain financially strong and grow, they must focus on both operational and innovative areas for investment that accelerate their journey to the future.
“Signals about what the future holds are in play and intensifying. The market economics of inflation, supply chain challenges, rising interest rates, and low unemployment are not abating,” says Denise Garth, chief Strategy officer at Majesco. “Declining profitability, increased catastrophe losses, rising loss ratios, increased claims costs, rising reinsurance prices and tightening capacity, lower disposable incomes, and a growing loss of talent from an acceleration of retirements, are all converging, creating a massive wedge for change. These top 10 trends are focused on adapting to a fast-changing marketplace and crucial areas insurers must focus on and invest in. Time is of the essence. Waiting is not an option.”
Most insurers have been on a consistent quest to optimize their business, but the work has not achieved the level of operational optimisation and innovation needed in today’s environment. While legacy systems may have been replaced, they were heavily customised and on-premise, leading to upgrade challenges, increased costs, limitations on digital and data capabilities, and poor user experiences for employees and customers, among other issues. The result is that it is time for a redo and adapt to the realities of today.
For insurers, there is no time like the present to alter their business strategy and their technology foundation. Moving business to next-gen cloud intelligent core platforms with embedded technologies like microservices, AI/ML models, generative AI, APIs, and digital will drive down operation expenses and plant the seeds for growth. This will ultimately lead insurers to separate themselves from the rest of the pack. Right now, priorities and decisions are being made that will influence who will emerge as winners in the next 3 to 5 years and will be sought after as partners and employers due to their ability to achieve scalability, agility, and their pivotal role in leveraging technology. These leaders will be prepared for the next major disruption, leaping forward from the competition.