P&C Personal Lines in 2021: How Are Insurer Strategies Changing?

December 17 2020 | Mark Breading

Individuals with strategy and planning roles have had a busy time in 2020 adapting to the evolving realities of the pandemic and economic uncertainties. 2021 is likely to be more of the same for people in these roles. Entering into 2020, personal lines insurers were on a transformation path. Innovative and bold strategies and headline-grabbing news about new initiatives were becoming common. Every insurer recognized the need to build a strong foundation with a modern core, accelerate their digital transformation, and become more aggressive in areas like expanding distribution and improving the customer agent/experience. Many had moved toward parallel transformation paths – operationalizing strategies and new target operating models to optimize the business while simultaneously driving breakthrough innovation with new products, new business models, and new distribution approaches. However, the events of 2020 caused many to change course.  

2021 PL Strategic InitiativesSMA's recent research report, 2021 Strategic Initiatives: P&C Personal Lines, provides insights into how strategies are shifting. All indications are that the transformation that began several years ago will continue in 2021. However, some significant changes are occurring in strategies as insurers consider the new realities of the business environment, risk landscape, and workforce shifts. Some of the big themes for 2021 include: 

  • Cost management and optimization dominate: In uncertain times, the first reaction is often to double down on expense management and operational efficiencies. To a certain extent, these areas are always a part of the equation. But in 2021, they will play a larger role as companies position for the post-pandemic environment.   
  • The leveraging of transformational technologies forges ahead: It may seem counter-intuitive that companies are going back to the basics, yet at the same time, are looking to implement new technologies like machine learning, bots, and computer vision. But these technologies have the potential to contribute to operational efficiencies as well as provide insights to improve profitability.  
  • Foundational initiatives like core modernization and BI remain vital: All signs point to a constant level of high activity as personal lines insurers advance their core and BI projects. These large, mission-critical projects become even more important as companies recognize the need to have a strong foundation.  

It would be erroneous to imply that innovation and "big news" type events will not occur in 2021. Even during this pandemic year, we have seen astounding IPOs, acquisitions, new products, and new partnerships. Leaders will never stop innovating and looking for advantage. This will probably be the case throughout 2021 as well. In fact, bold leaders often see times like these as an opportunity to position for the next wave of growth and get even further ahead of their competitors. However, it is just as likely that most mainstream companies in the industry will be laser-focused on cost management, business optimization, and successfully completing and executing projects that are already in motion. One thing is sure: entering into 2021, personal lines insurers will continue to closely monitor development related to COVID-19, the economy, customer behavior patterns, and many other dimensions that affect risk, claims, and business opportunities. It will not be surprising to see adjustments to strategic initiatives happening throughout the year.   

For more information on other themes and strategic initiatives of personal lines insurers, read SMA's new research report, 2021 Strategic Initiatives: P&C Personal Lines.   

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Mark Breading
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