By Fernando Lopez Orlandi, Sales Manager in Latin America, Charles Taylor InsureTech for Insurance Day, first published on  4 February 2022: New technology trends in 2022 for LatAm’s insurance market

At the beginning of the new year, we can look back and evaluate what happened in 2021, how the market moved and consider what will happen during the coming year.

We cannot deny 2021 has been the year in which the world began to move again, recovering the speed it had in the pre-pandemic era. And that, inevitably, has reactivated the insurance market.

The economic recovery continues with global GDP expected to grow almost 5% in 2022. This GDP growth would suggest greater demand for insurance products and services lie ahead.

During 2021 we saw much of Latin America was focused on making up for time lost during 2020 and this was reflected in investments in applied technology.

We found a large number of technological innovation initiatives in all the countries of the Latin America region, especially in Mexico, Chile, and Peru.

We have seen comprehensive technological renewal programmes in this market. These have varied from the change of core systems and the development of digital channels to more specific needs related to applied artificial intelligence (AI), the development of digital business and of course, omnichannel strategies.

During 2021 we saw much of Latin America was focused on making up for time lost during 2020 and this was reflected in investments in applied technology

We have also observed technological demand does not come only from insurers, but also from other participants in the value chain such as banks and the different intermediation channels.

There are multiple factors driving this change. The first is related to the changing consumer profile. Today, the new consumer profile organisations must focus on is a person born in this millennium, with high digital capabilities. This forces organisations (insurers, intermediaries, banks, retailers) to innovate in the way they interact with insured people.

Second is the high availability of data and the maturity of the insurance industry to start monetising that information.

The third factor is the growth of new insurtech in the region, which allows intermediaries and insurers to make interesting synergies with them and allows them to approach new solutions and technologies. These kinds of synergies allow access to technologies that could not be profitably achieved through in-house developments.

Finally, we are seeing many continually changing their business models and customer-related marketing strategies to remain profitable and stay in business. A clear example is the boom in demand for travel assistance insurance and the challenge of companies to provide a “sexy” experience.

This is a great opportunity for the industry to redefine travel insurance, so the customer continues to engage with it after the Covid boom ends. The other side of this is the industry’s concern a new Covid variant will lead to political or health measures that generate interruption of activities and that will be reflected in a drop in policies.

Having reflected on these market changes, I believe these will be the four main trends regarding technological innovation in the Latin American insurance market by 2022.

Digitisation of processes: we understand although this is an area in which considerable progress has been made in recent years, in many cases this is an outstanding requirement for many organisations. Digital transformation is no longer an option and the conversation at this time, for companies, should be: “Where should I focus to be more profitable and efficient?” We are in a world that demands new products be brought to market quickly.

This can only be achieved with flexible technologies that can be manipulated quickly. The same goes for back-office processes. Today there are multiple technologies that allow you to automate and digitise manual processes.

Development of digital channels and omnichannel: the changing profile of the insured, combined with the new consumption habits post-pandemic, requires a new approach to engaging new customers. Onboarding through digital sales and after-sales channels is no longer an option but a fundamental requirement.

We are at a time of consumer maturity, where the difference between multi-channel and omni-channel is evident. Whoever offers the insured the best comprehensive and quality experience, will win market share.

Data analytics and applied AI: there is no doubt the world is experiencing a boom in the use of data. We all trust our devices will somehow magically tell us what to have for lunch today, what kind of clothes to wear or what hotel to stay at on our next trip. The challenge for the insurance industry is to use the data in a meaningful way, beyond the use of data by itself.

Examples include those who propose tested and validated business models, based on the different needs of the industry. As solutions for the early detection of fraud, cross-selling and up-selling models, customer targeting and prediction of legal cases among others. In Latin America there are many insurtechs that now offer different solutions applied to each of these needs.

Integration with ecosystems: all of this is of limited application without an agile implementation strategy for an internal and external solution ecosystem. We have been talking about API-based systems for a few years now to meet the need for fast integrations.

The constant appearance of new insurtechs and alliances between complementary companies forces organisations to have an architecture that allows them to quickly connect and disconnect from the different ecosystems that surround them. I am sure this will be the year where we will see technologies that facilitate these types of integrations.

To conclude, 2022 will be a year in which organisations continue their path of digital transformation and evolution. From now on, each one must walk their path according to their priorities and needs, but without a doubt, these four pillars will be the ones that set the course.

Fernando López Orlandi is Latin America sales manager at Charles Taylor InsureTech