NTT DATA has released The Insurance 2023 Vision white paper, which outlines the needs and challenges of the insurance industry and aims to help companies capitalize on the growth and innovation opportunities that will arise this year.

As explained in the study, the insurance industry will experience significant changes in 2023 driven by multiple factors and five key challenges that insurers must adapt to in order to thrive in a competitive and uncertain environment. These five challenges are:

• Accelerate IT transformation: Rapid development requires prioritizing customer experience. Insurers need to leverage new technologies like AI and automation, integrate APIs to streamline processes and deliver personalized experiences. Leveraging innovation and data-driven approaches is critical to meet changing customer needs and stay ahead of the curve.
• Organize the ecosystem: The insurance industry operates as a complex network where customer focus and customization are key. Fostering collaboration between participants and prioritizing engagement and incentives connects and converts customers. Regulations, digital transformation, startups, science and technology giants shape the ecosystem.
• Discover new products: While disruptions bring challenges, recent changes offer opportunities for growth and a better customer experience. Insurers must face the risk, adapt to changing requirements and test new offers. Insurtechs exemplify flexibility and innovation, integrating insurance into broader solutions. New technologies like the Metaverse improve risk assessment and claims processing.
• ESG integration: The focus is on ecological, social and administrative factors. Insurers assess climate risks, promote sustainability and encourage diversity. Transparency and compliance are ensured through robust governance practices. Opportunities arise from net-zero transition, risk transfer and customization services. Addressing talent challenges and responding to trends in consumer well-being is important.
• Dealing with unexpected challenges – Digital Risks/Cybersecurity: Cyber ​​threats represent a significant risk that requires adequate protection. Closing the gap between potential financial losses and insurance policies requires collaboration between insurers, businesses, policymakers and cybersecurity professionals. Optimizing cybersecurity product design, risk assessment and vulnerability pricing is critical. “Smart distribution” will emerge as insurers adapt and offer “insurance as a service” through efficient channels.

Ultimately, the report concludes that the insurance industry will face significant changes and challenges in 2023 driven by global factors such as the health crisis, economic changes and climate risks. Amidst these uncertainties, there are opportunities for insurers to succeed by taking important actions. This includes accelerating IT transformation, orchestrating the insurance ecosystem, researching new products, addressing environmental and social issues, and mitigating digital risk.

These strategies enable insurers to make better use of data, improve customer experience, promote sustainability and close the cyber insurance gap. These actions are critical for insurers to adapt and thrive in the changing landscape of 2023.