2022 in Review – Part One: Innovation flourishes, despite the challenges

Hello reader 👋 It’s Catherine Loftus here – Head of Growth Marketing at Nuon AI. I’m responsible for the Nuon AI brand and customer growth strategy. If you’ve been part of our neon yellow universe on social media or at an event, or read one of our emails, white papers or blogs, that’s my area.

As another year draws to a close, I wanted to take some time to reflect on what this year has meant both for Nuon AI and for the industry as a whole.

In this first part of a two-part series, I’ll share some of the insights we’ve gleaned in speaking to our network of digital insurance customers, AI experts, team members, advisors and investors. Read on to hear their view of the challenges 2022 brought, and how the industry can not only survive – but thrive – in 2023. 

Come back for part two, where I’ll be reflecting on what 2022 has meant for Nuon AI, and our goals for next year.

2022: A year of significant challenges

The challenges of 2022 have sent shockwaves around the world. With soaring inflation, a cost of living crisis, and war in Europe, the impacts on consumer behaviour and the risk landscape are significant. 

But it’s not all negative. Despite challenging conditions, innovation has flourished. I’ve worked in financial services and insurtech on and off over the last decade and it seems to me that insurers have never been more conscious of the need to evolve. For those poised to take the leap, the opportunities are very exciting. 

What do you see as the greatest challenges facing insurance product performance in 2023? Let us know here.

A tough economic landscape

The number one challenge that came up in our conversations is, unsurprisingly, the economic landscape. The global economic downturn has had an unpredictable effect on consumer demand for insurance products. 

Emerging from the pandemic, some travel insurance providers experienced increased awareness and appetite as customers became more aware of the importance of protection.   

But now, there is an increased strain on consumer finances, and along with pet insurance, demand for travel cover has dipped as consumers classify it as non-essential spending. With a tough winter ahead and interest rates rising, research by GlobalData – as reported by Insurtech Digital – suggests as many as one in ten pet and travel policies are being cancelled to save cash.

However, despite the challenges, many insurers remain optimistic. There is momentum to innovate, and with the right resources and the right partners, the opportunities are wide open. And transformation is the language of the day.

Climate change rears its head

Climate change has long been at the forefront of our minds as consumers, as we all seek to do our bit to reduce our carbon footprint, and make swaps in our daily lives that are more earth-friendly.

Now, in AXA’s recent Future Risks Report 2022, climate change was named as the top concern for experts in every region – including the US, where it was the primary concern amongst the general public for the very first time.

Read Nuon AI partner Paul Doran’s analysis of what AXA’s Future Risks Report 2022 means for insurers.

And the impacts are being felt in the industry. Severe weather conditions bring turbulence for insurance product performance, especially in areas where the impacts of climate change are being hardest felt. Insurance customers across the pond tell us they experience drops in volume due to storms, followed by dramatic increases in the aftermath.

This is a reminder of why remaining dynamic and responsive to market conditions is an essential requirement for insurers that wish to weather the storm.