From shifts in regulation to advances in technology, the societal landscape is changing, and insurance companies have no choice but to keep up. In order to keep these external pressures from becoming overwhelming, businesses will have to adjust their policies to account for a new environment. Here are some of the most pressing outside concerns.
Changes in legislation:
Online poker went under in the United States a couple years ago, but it's popped back up in select states, including Nevada. In order to properly deal with this new industry, fledgling web gambling companies are going to have to figure out which Nevada business insurance best covers their particular situation. In response, insurers are going to have to design policies that properly cover an activity that until recently was largely unregulated.
That's just one of several examples of new laws that could have an effect on the types of coverage people seek. Underwriting companies have to not only be able to respond to these shifts, but also to predict them in advance.
Targeted growth opportunities:
An increase in the demographic data available means that insurance companies can more accurately target the segments that they can best deliver for. Consumers have come to expect a somewhat personalized experience, and it's up to companies to figure out how to best deliver to their chosen markets.
Proliferation of Big Data:
Analytics became even more mainstream this year, and will likely continue being a big story into 2014. Insurance companies will have to take advantage of the benefits of this sort of technology, as well as avoid the risks. The former can be accomplished by parsing and sorting claims data to help provide the best and most cost-effective service to customers, and the latter will need to come in the form of heavy investment in information security. Hacking is becoming more sophisticated, and a business caught unawares could be in big trouble.
Investment income performance has fallen over 12 percent in the past five years. Insurers are well-advised to seek different sources of capital to protect against catastrophe, as well as to ensure they have proper risk management protocol in place. The worst possible position for a company to be caught in is unawares, so a keen knowledge of financial and regulatory shifts is a must for any strong company.