Top 5 Predictions for 2021


Towards the end of 2019, I wrote my top 5 Insurtech trends to watch for in 2020. Back then, none of us had an idea of how unusual and tumultuous 2020 would prove to be. Nevertheless, many of the trends I identified in that article were born out over the past 12 months. So I guess, not too bad of a crystal ball lens on what really matters!

The number one trend I suggested to look out for was the emergence of health-sector disrupting tech ventures. In 2020, High tech HealthTech ventures received over $27Bn in investment, one of the few sectors which have received healthy investment funds this past year. These would include VerifyOscarBright HealthWeDoctorBabylon Health, which all received funding during the past few months, weeks, or days, and/or entered interesting partnerships and/or planned future IPOs.

One area which certainly gained major traction in 2021 is the usage of telehealth or telemedicine technology, which has boomed globally since the emergence of Covid-19 as patients and healthcare providers seek to avoid crowded waiting rooms and doctors’ offices. Telehealth or telemedicine ventures raised over $1Bn more this year than last year, reaching nearly $5Bn in funding to date—one of the few new sectors that did well this past year. Among many other tech ventures, Oscar made a swift transition to make the most of its digital platform — 30% of Oscar users have made active use of a telemedicine service compared to an average of just 10% nationwide across the USA. I have made inquiries in the pet sector too. And BoughtByMany was highlighted as the brand facilitating such interactions with their free video vet calls.

Here are the predictions incumbent players, new entrants, innovators, and entrepreneurs must pay attention to as we enter 2021.

A shift toward sustainability-focused strategies

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Predictions 2, 3, and 4 of my 2020 article were already centered on that particular topic.

As we undertook experimental customer research this past year around the millennials, Gen Z, and the digital nomads, it is clear that this requirement must not be overlooked. In fact, nearly half of all consumers interviewed in a Kearney survey earlier this year said that the pandemic had made them more concerned about the environment. This has not changed over the past months and made specific sectors more aware of what they may have to lose by not adapting strategies and tactics.

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Many financial services institutions have elevated the sustainability topic through lending, investment, and insurance announcements. I have highlighted those in some of my recent writing and have engaged with several insurance carriers; I would say that this trend will not slow down. Several insurers have certainly worked to improve their lens, approach, and strategy around this specific topic.

A growing number of research bodies show that realigning one’s efforts towards sustainability is good for business. In some cases, sustainability-marketed products can generate five times more demand than the competition.

As a result, there’s significant pressure on brands to accurately footprint and reduce carbon emissions, cut down on plastic waste, and vet supply chains to eliminate unethical practices. This movement toward a more sustainable private sector leads to a new generation of businesses whose performance is evaluated based on more than their stock price.

In 2021, I expect a variety of Tech innovators to facilitate the transition to a more sustainable economy by partnering with corporations that want to implement sustainability-focused strategies (not just ticking the boxes), investing in businesses that demonstrate their alignment to the 17 UN SDGs, while launching relevant products and services, that are inclusive and incentivising sustainable actions, tying premium prices to the risks associated with sustainable business models (and vice versa) and condemning unsustainable business practices.

Addressing climate change through tech disruption

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Underpinning many broader sustainability issues is, of course, the existential threat posed by climate change as shared in last year’s prediction #3. It’s hard to understate the scale or severity of the challenges posed by climate change —  under a so-called “intermediate” future emissions scenario – the latest models predict global temperatures will rise by 2.0 and 4.7°F by 2100. The TCFD has been instrumental in getting many businesses aligned with the agenda and new requirements.

The good news is that awareness of climate change has grown, with 79% of Europeans seeing it as a severe problem already in 2019 and 76% of Americans saying they believe the earth’s temperature will increase over the next 100 years.

What’s more, the latest modelling projects, including work from the IPCC mean it’s now possible to accurately predict the physical climate risk associated with a wide variety of business activities and assets. We have sourced and screened 100s of ventures in the area this past year and can confirm this is real stuff. Also, working with leaders in the sector, we have identified new design implications.

Many InsurTech firms in 2021 will need to look wider than their core primary scope to fit with the new demands. New players are coming to disrupt our InsurTech landscape to solve far more complex problems than those contemplated by many young ventures. Those new entrants are combining big data, cognitive intelligence, the internet of things, cloud computing, and 5G to support complex climate change challenges across many perils, exposure types, and sectors.

Many indicators show that 2021 will be a year for robust responses to climate change. This will include the emergence of new economic and political climate frameworks and the popularity of climate-related stock indexes and trading platforms to help incumbent players deal with their carbon footprints. What will the insurance products and services of the future look like?

I will say… thrilling!

Renewed interest in underserved market segments

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Millennials, Gen Z, Digital Nomads, The Elderly, Underbanked, Gender or Racial Minorities, Small Businesses, Gig economy workers are all segments that are being underrepresented or underserved by financial services providers, including insurance. And while it is often easy to focus on the products we want to sell, let’s focus for once on the segments that we can serve.

Many of these customer groups find it difficult to use or benefit from mainstream financial and insurance offers due to factors like poor credit history, a recent arrival in a specific geography, keeping their cash under their bed (joking… was checking if you were still reading).

While less likely to be on many incumbents’ list due to the required market sizes those businesses need to achieve to be considered relevant, the underserved segment represents at least 70% of tomorrow’s market growth potential and therefore more likely to be on the InsurTech, New Tech, and Big Tech radars with the time, effort, financial resources and dexterity to pay attention to particular needs and to experiment so that to determine the root cause of what is needed. Indeed, from Google to the FCC, influential organisations worldwide are applying a more thorough lens to diversity, inclusion, and equality, trying to meet underserved communities’ needs.

Is this truly a $200 Billion opportunity? Well, it certainly depends on how you cut the cake. Opportunities certainly lie within partnership agreements that ease the distribution of adapted services and collaborative ecosystems that foster strategic participation, unique structures, and accelerate the seamless access to relevant value-added services.

Health & Wellness: From Protection to Prevention

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COVID-19 pandemic has dramatically changed the way healthcare is provided around the world. In many places, the crisis has exposed the pitfalls of relying on outdated technologies and has generated renewed interest in HealthTech and InsurTech ventures and their digital platforms and enabling tools that promote and ease customer wellbeing. As noted, telehealth has been a beneficiary of the global crisis as businesses have had to quickly deliver a digitised version of client-facing services, including online booking platforms, assisted and remote provision of sensor-enabled health capabilities.

This past year, many insurers inquired about sales and marketing effectiveness, cognitive intelligence-led collaborative and remote digitisation tools for work, claims, and services. In particular, requests for mental health solutions can support equally internal staff and customers via more tailored health benefits. And as noted in my introduction, many health-focused InsurTechs have benefited from this year’s shift and were able to raise funding and support unique digital initiatives.

In direct response to the pandemic,  major interest in wellness will likely increase in 2021 and include a clear demand for better alignment between health and wellness to promote more preventative-led behaviour and immunity tracking and boosting programs on-Demand home caring solutions to support young as well as ageing societies. Another pandemic-driven health phenomenon to look out for next year focuses on human-powered travel (e.g., cycling, hiking, walking). Individuals reconnect with nature and evaluate more sustainable travel approaches, while international travel practices recover slowly. Healthy lifestyles will be on the map in all senses of the words, and this is why solutions such as Laka will likely prevail.

Digitization 2.0

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Following an eventful 2020, it is clear that digital transformation initiatives will likely reach new levels. My learnings working with professor Lanzolla this past year on the disruptions impacting finance and insurance have made me realize a few things. We indeed have not yet seen the extent of the unbundling and re-bundling that will affect our sector and the business models that will be most effective, transformative, and/or competitive.

As market participants accelerate their digitisation paths and gain access to new opportunities, early adopters will seek ways to industrialise and democratise the most effective methods to accelerate the engagement in profit-sharing partnerships or the launch of disruptive businesses. Insurance products will go through a gradual evolution as new risk types emerge that properly reflect societies’ challenges and needs. The latter will require ready access to connected digital technologies such as AI5G, and the cloud.

Platforms, Collaboration & Industry Ecosystems

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The acceleration of the ecosystem movement is in motion. The model that emerged from the rise of the gig and sharing economies in automotive, real estate, and freelancer services was the first step toward designing collaborative and multi-sided user-centric platforms.

Industry ecosystems are not static; they are dynamic. They continuously evolve based on customer and market demands, which makes them obviously simple and complex at the same time. Still, most of all, operationally resilient as the baseline platform becomes the core of future successes. As I and many others shared when we wrote our chapters in the Insurtech book, while collaborative platforms and ecosystems benefit from the network effect, they are also built on strong principles, including friction-free engagements, trust, and transparency.

The trends I have highlighted above require a different lens of ecosystem building, which includes a core purpose and some well-defined values to direct the design of those new environments and their impact on humanity and value creation. Products and services will then combine a multitude of layers aligned with particular customer engagement needs.

A small warning, loyalties will likely shift from named brands to tight and intertwined ecosystems, meaning many brands. Market players interested in the model need to be prepared for it. Ant FinancialPingAnZhongAn are well-known experts within this sphere of knowledge.

This article was first published on LinkedIn here.


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