March 25, 2021
Industry Challenge
Is the record high for Bitcoin a leading indicator of inflation?
Big Picture: Financial assets like stocks and Bitcoin are at record highs, and many point to these as leading indicators for inflation. It’s a challenge insurers will need to face after COVID.
What they’re saying: Some worry that the high levels of inflation that the U.S. experienced in the 1970s are around the corner as the nation recovers from the shuttered businesses and unemployment levels brought about by COVID closures. Here’s a review of the factors that triggered inflation in past decades and how three areas of P&C insurance are impacted by changes in inflation rates.
Read: The Inflation Specter Looms for Property/Casualty Insurers
Trend watch
Digitization is speeding up with the help of West Bend, the Big I of Wisconsin, and Dais
Quote: “All of us believe in independent agents. They are the risk experts, the marketing and sales experts, and they are entrepreneurs. The shift to digital is an opportunity for growth, and it’s our job to provide the right tools. We are giving agents a single line of code that opens up a million possibilities, and this is just the beginning.” – Jason Kolb, CEO at Dais
Read: West Bend, The Big I of Wisconsin, and Dais team up to help agents sell digitally
Trend watch
Open finance opens the doors to disruption in the UK
What they’re saying: Open Banking really did what it intended to do, opened the banking world up for new tech and innovation. That has been a good thing for insurers as it helps to differentiate offerings. However, Open Finance, the next step in open banking, creates a huge disruption opportunity in insurance, as data like renewal dates and policy information will be much more easily accessible.
Our Thoughts: The UK is really leading the way on this, and being a testing ground for policies that will likely shape the world. This will make the intake process a lot faster, making quoting no longer a competitive advantage. Differentiators are just going to grow in importance, as otherwise there will be a race to the bottom on price.
Read: Open Banking & Finance: The Opportunity And Threat For Uk General Insurers
Trend Watch
Google stepping up insurance efforts with new hires
Question to ponder: Both Google and Amazon are getting into insurance, and both are focused on the data. As they get more and more control of the data, what does that do for the industry? What are the risks and opportunities?
Quote: “The potential of these big tech companies to move further into insurance should be on the minds of all in the industry and should motivate them to build out their own digital capabilities. Otherwise, they risk being disintermediated or commoditized,” From CB insights
Read: Google hires new managing director of insurance for North America
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