The insurance industry is constantly evolving, with new products continually on offer for businesses of all sizes and new trends emerging. As we move into a new decade in 2020, we can expect to see new challenges as insurers balance the needs of the consumer with changing market conditions. So, what does this mean for your business? Let’s explore what we can expect in 2020 when it comes to the commercial insurance market.
Digital transformation
As digital transformation continues into 2020 and beyond, it offers a unique opportunity for the insurance industry to embrace the new changes and be open to new digital trends. Embracing digital advances gives insurers the opportunity to engage with their market, open themselves to new opportunities and offer more personalised products to consumers. This is also in-keeping with the expectations of consumers who are used to the convenience which comes from digital interaction. This means that insurers will be increasingly working to engage consumers across a number of channels such as online, telephone engagement, social media and improved mobile apps. The increase in digital technology also means that data and analytics can be used to greater effect to monitor the effectiveness of consumer engagement across the various digital platforms. To ensure that they stay relevant, insurers need to continually strive to keep up with the digital community.
Pricing pressure
With pricing pressures continuing in the insurance industry due to a hardening market, 2020 could see the market facing pricing increases as time goes on. With tighter underwriting and more restrictive policies, brokers will be working hard on behalf of their customers to find appropriate insurance solutions. Therefore, it’s essential that businesses work with their insurance broker to balance appropriate risk management strategies with premiums which suit your budget. With global insurance prices set to rise, brokers are becoming even more important to businesses across Australia. Not only will brokers be able to understand and articulate trends in the market, they’ll also use their expertise to get in front of rate increases and secure the best possible deal for businesses.
Cyber security
While cyber insurance was not something that many businesses considered a few years ago, it’s becoming an increasingly important aspect of risk management for businesses. With cyber-crime on the rise, businesses are turning to cyber insurance to ensure that their risk exposures are covered. We hear about numerous high profile incidents relating to data breaches on the news but businesses of all sizes can be negatively impacted. In 2020, we can expect to see increased regulation around the cyber insurance market as legislation pertaining to data privacy and security continues to evolve. Insurers will also develop a greater understanding of the cyber risk facing Australian businesses and develop products which are tailored to address these risk exposures. The increased interest in cyber security comes on the back of the introduction of Australia’s Mandatory Data Breach legislation in February 2018.
Climate change
Insurers are becoming increasingly aware of the impact of climate change on the insurance market, with 2019 seeing an increase in natural disasters which are related to climate change. At one time, climate-related disasters were linked to large scale and infrequent events. However, we are increasingly seeing the impact of climate change and the recent devastating bushfires across Australia have put this issue on the forefront. With this changing landscape, businesses need to consider the potential impact of climate change related events due to the increasing volatility of the weather. The costs associated with climate change meant that insurers will be assessing the need for targeted products to support businesses. The insurance industry itself will also likely take measures to manage the increased claims associated with climate related events.
Preventative approach
Into 2020, we can expect to see that insurers embrace a more preventative approach when it comes to risk management for businesses. While insurance policies themselves offer protection for businesses, the industry will be innovating with new approaches which focus on assisting customers in implementing measures to protect their businesses from the risk of claims. This is in keeping with a more customer-focussed approach where there is an emphasis on enhancing the experience of businesses with insurers, rather it being a process where insurance is simply renewed each year with little further engagement. Insurance brokers are on the forefront of this trend given that they work hard to build relationships with businesses and assist in robust risk management strategies.
Increased accountability
In 2019, the report from the Royal Commission following an investigation into Australia’s banking sector was released. The recommendations that have come out of this report will have a significant impact on the commercial insurance industry going forward. The recommendations included an outright ban on cold calling, a cap on life insurance commissions, limitations on add-on insurance products, and an emphasis on insurers being honest and fair when it comes to claims. With the Royal Commission’s focus on reducing harm to the consumer, insurers more than ever will be reviewing their relationship with their customers and ensuring that practices associated with selling insurance, the fairness of the insurance policy and the handling of claims are taken seriously. Insurance brokers are on the forefront when it comes to ensuring that businesses are able to navigate the system effectively when it comes to their insurance needs.
GSK Insurance Brokers has become one of Australia’s leading insurance brokers with a strong focus on delivering exceptional customer service. Our experienced brokers will analyse your specific risk exposures and develop an insurance solution to protect your business when things go wrong. We canvas local and international markets to find the best quality insurance cover for your needs.
For more information about commercial insurance for your business, contact GSK Insurance Brokers today on (08) 9478 1933 and our team can talk you through the best options for your business.
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