Nearly every industry has been affected by core technological trends over the past few years. Products and services are being reshaped and altered by a multitude of technological advancements.
The dynamics of insurance are likely to change due to numerous technological advances. The risk of auto insurance will shift from driver to machine learning algorithms and software behind self-driving cars. Using satellites, drones, and real-time data, insurers will be able to accurately assess the risks at facilities. In the wake of natural catastrophes, claims will be processed in an automated, infinitely scalable, and lightning-fast manner. “Wrapped” products that adapt seamlessly to changing customer needs will be available from the life insurance industry.
Trends that will significantly impact the insurance industry includes:
1, AI in Practice:
Carriers can more fundamentally reengineer existing core processes to be more predictive as artificial intelligence becomes more prevalent and algorithm development becomes more commoditized. As core processes become AI-enabled, distribution, underwriting, claims, and service will be disrupted. This will result in a “human in the loop” model that increases productivity and allows for more personalized customer experiences.
2. Infrastructure on a distributed basis
The adoption of cloud services for all core systems will allow insurers to offer better customer service and launch new products faster as cloud technology matures. Furthermore, cloud computing will be vital for fully understanding and using incredibly large data sets (including tens of millions of claims data points). In an era where ecosystems are developing globally, cloud-native insurers are best positioned to play the role of ecosystem orchestrators, acting as an interface among customers, distributors, insurtech, healthcare providers, carriers, and reinsurers.
3. Global connectivity in the future
As part of the evolution of the core auto product, insurers are using telematics in many markets. The widespread use of IoT could reshape, among other things, the way our lives, our health, our properties, and even our businesses are conducted. Insurers are able to understand risk effectively, both at the time of purchase and on an ongoing basis, as the frequency and specificity of data are increased through IoT devices.
4. Taking automation and virtualization to a new level
For years, insurers have invested in robotic process automation to automate processes, especially back-office operations. However, emerging technologies are allowing carriers to rethink their products and services from the ground up. Industrial IoT, for example, can be used to detect a problem before it escalates to a claim by supplying real-time monitoring of equipment.
5. A trust-based architecture
Customers must continue to share sensitive customer information with insurers as products and services evolve. Insurers will be able to better manage risk and use customer data using new technologies. This will be a crucial step toward transitioning to a “predict and prevent” model of insurance where data is shared frequently and insurers play a more proactive role in claims prevention. With increased adoption, blockchain will make it easier for carriers to deal with customer data in a safe and consistent way and simplify mundane tasks such as identification and authentication.