Future tech lends hand to insurance industry
Over the next 25 years, a vast number of new technologies will revolutionise our industry, but as in other sectors, it will hinge on how well and discreetly private data can be used
During my daily commute, I communicate with the world via my iPhone and Apple Watch, which embody such powerful communication technologies that were almost unimaginable just 15 years ago.
I recognise that this type of technology, in tandem with AI, will also fundamentally change our industry.
To be successful in 2030 and beyond, we must adapt, learn and understand the trends which are driving the digital age.
Over the next 25 years, a vast number of new technologies will revolutionise our industry. We will see a major increase in the number of connected consumer devices.
Today, the usage levels of IoT devices (such as smartwatches, smart phones, fitness trackers, etc) continue to grow exponentially and will be joined by new entrants across several segments such as medical devices, clothing, footwear, eyewear, home appliances. The list goes on and on.
These smart devices will create waves of new data, which will empower insurance providers of the future to better understand their clients, resulting in bespoke products and services supported by personalised pricing and real-time distribution services.
As big data continues to evolve and get smarter, businesses across industries will forge partnerships and share information (with privacy and data protected, of course) that will enable products and services to be precisely targeted and relevant for their customers. Smart trainers for example, will be linked to a health insurance database, enabling health insurance cover to reward specific lifestyles and behaviours.
We can see elements of this today in intelligent multi-platform advertising and marketing. One such example is the popular Netflix series House of Cards in which data guided Netflix’s content investment decision. The internet giant didn’t rely on its intuition or instinct that the cast and director would make a great show; rather, the content creation was driven by big data insights.
Everything from creative ideation and casting to the production and release of the show was targeted to specific customer segments.
With the increased availability of these new technologies, insurance providers will need to develop or acquire AI models that are constantly learning and adapting — enabling improved products and services with increased customer engagement while responding to shifts in underlying risks and behaviours in real-time.
Harnessing the power of AI to make sense of all this data will in theory enable insurance providers to instantly create personalised risk profiles of each customer. Customers will be able to take out a life policy or purchase vehicle insurance in a matter of seconds. These transactions can also be realised through blockchain, streamlining contract processing and payment verification processes, thus reducing administrative costs. The benefits of these will ultimately be passed on to the customer.
The business models of the past will no longer be sustainable. Agents that survive to sell insurance will be replaced by direct-tovendor models through online portals and comparison websites.
Insurance providers will increasingly use smart digital assistants to help run their marketing strategies and utilise AI systems to develop bespoke products for their clients.
Adopting new technologies
Interactions with service providers will consist of a series of AI enabled communications supplemented by face-to-face human interactions, transforming the customer experience by delivering smart responses and suggestions tailored to the exact present and future needs of each individual client.
The winners in the era of AI will be those providers that adopt new technologies to create smart products, which actively learn from new data sources, streamline processes, lower costs, while providing excellent customer service.
As insurance providers decide how to use technology to support their business and long-term strategies, their companies will undergo rolling change. This will impact all aspects of their business, from operations and technology through to individual employees. For this reason, the change that we need is equally about culture as it is about hiring the right skills.
Some businesses are already beginning to take steps in this direction by acquiring smaller “insurtech” companies, and creating partnerships with leading academic institutions, the latter of which we are already exploring in tandem with AI development.
In the future, a successful data strategy will need to include multiple routes to market to obtain and secure access to external data, as well as ways to merge this data with internal processes.
There is no doubt change is coming and we are already actively engaged in many of these areas as we prepare our business for the future.