Insurance 2021: 14 trends set to change the business

From Open Insurance to Connected Insurance to Parametric and Invisible Insurance. Here are the trends of innovation in insurance 2021. With two focuses: technologies and environment

Published on 10 Mar 2021

What trends will push insurance towards change and innovation in 2021? Many, with different impacts, can be traced to two categories: technology, of course, but also environment.

In the italian research “The impact of innovation on the organizational model of insurance”, carried out by EY with the Italian Insurtech Association, 14 trends are identified that will dominate the present and the future of insurance. Trends that will lead to less and less distinction between insurance and insurtech. “Not all of them are expected to have the same potential and not all of them will produce effects immediately”, explains Carlo Alberto Minasi, Chief Innovation Officer of EY. “For example, the data-driven approach is topical and fundamental, as well as Connected Insurance. Embedded Insurance, on the other hand, is something yet to come”.

Data-driven propositions

The data-driven approach is already a dominant trend in the insurance industry, and will continue to play a massive role in Insurance 2021. Always the most valuable asset for insurance companies, data is becoming more and more important in today’s market, and it is essential to know how to leverage its potential, turning the huge amount of data collected into useful information for decision-making processes..

Open insurance/Ecosystems

This is a phase of transition where new players are breaking into the insurance market, challenging the exclusiveness of traditional insurance companies and the type of services offered by them. The market thus becomes more competitive, but for insurance 2021 there is a possibility of synergy with new stakeholders (insurtech, other financial operators and players from other sectors) opening up new ecosystem possibilities.

Digital engagement platforms

Digital transformation is accelerating, and not even the insurance sector can shirk it unless it wants to be left behind. Innovative ways of interacting do not necessarily have to replace traditional distribution channels, but can rather complement them to round out the offering. In particular, there is much attention on the future prospects of chatbots and virtual assistants..

Behavioural insurance

Behavioural insurance is intended to bring to the market a paradigm shift: from the traditional insurance model limited to damage compensation to a model focused on prevention. Although the trend is still quite immature, there are already many players on the market that apply reward and gamification strategies to encourage the user to adopt virtuous behaviors.

IoT/Connected insurance

A second trend is also part of the data-driven debate: the use of IoT devices for a connected insurance model, capable of exploiting information gathered in real-time. Thanks to the growing pervasiveness and evolution of IoT devices present in everyday life, a new mass of data on user behavior, obtained in real-time, can be used to improve protection and prevention services, identify fraudulent behavior and customize offers.

Embedded/Invisible insurance

The embedded or invisible insurance model envisages insurance coverage as an element within a product or service purchase bundle. This new approach, based on collaboration with non-insurance players, focuses on economic and/or customer experience advantages to entice the user to acquire a protection tool associated with the product/service he intends to purchase..

Automated underwriting

Among the trends arising from the steady development of automation systems is also automated underwriting. This process will improve and speed up the flow of the underwriting process, allow for more accurate monitoring of documents, and provide a higher level of customer service by checking the status of cases at any time in just few clicks.

On-demand/Instant insurance

2020 was the first year on-demand policies started to break into the Italian insurance market. The demand of the digital consumer for smarter, faster and more personalized services is high, the potential is huge, the trend is positive, but the numbers are still low: a slice of the market worth investing in..

Natural catastrophes

There is still a low level of insurance culture with regard to weather-related risks, yet in 2020, damage caused by climate and natural events will be the world’s second biggest fear after health. According to a report by Axa, in Italy we are the first in the world for the perception of vulnerability to emerging risks, and in line with the rest of the world, natural disasters rank second among perceived risks, after health..

Parametric insurance

With the transition of user demand towards more flexible insurance models, the trend of parametric insurance is also showing potential. This is an insurance product that departs from the traditional offer by offering predefined payments based on a certain trigger event (natural disaster in a certain area, achievement of a certain market index…) rather than on the actual damage caused to the user.


Again this year, mobility will be an important trend for the industry: although the pandemic has limited travel, at the same time new players and new ways of moving have spread (micro-mobility being one of them), opening up new challenges and potential.

AI/ML/Predictive analytics

As we get back to the inevitable digital transformation of the industry, more and more attention will be paid to Artificial Intelligence, Machine Learning and Predictive Analysis technologies, increasingly refined tools for automation, data and process management, personalization and creation of new user-friendly offerings.

Cyber Security Risk

Cyber security is still a prevailing trend as well, and user and business awareness continues to grow, particularly this year with the massive transition to home office systems that risk opening up company IT systems to new vulnerabilities.


Sustainability, both environmental and social, is an increasingly urgent trend in various sectors, and the user is beginning to consider sustainability factors even when choosing insurance, so it will be an important factor for all players to consider. Among the most felt themes in Italy: fight against illegal activities, support to public health, fight against climate change.

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