Technology trends: Insurance Industry
Delivered September 13, 2019. Contributor: Sunali T.
Goals
To identify technology trends that are currently impacting the insurance industry and trends that will shape the industry in the future (with start-up examples) with the end objective of determining key differentiators to adapt.
Early Findings
Emerging technology trends (future impact)
- Bain & Company and Google have identified 7 key technologies that have begun to disrupt the insurance industry and are predicted to accelerate within the next 3-5 years.
- Internet of things: insurers can analyze data such as consumer behavior using sensors in vehicles and equipment for proactive maintenance, reduce accidents and claims, etc. - Machine learning: using machine learning, insurance IT systems can quickly adapt to new data without the need for reprogramming. It can be used for underwriting, product pricing and managing claims. - Advanced analytics: can be used to gain extensive insights into customer needs/preferences and also detect fraud. - Distributed ledger technology: processing time can be greatly reduced using distributed ledgers. For e.g through smart contracts where policies can be fully automated using blockchain technology. - Virtual reality (VR): can be used for underwriting information gathering. For e.g reconstruction of an accident scene in minute detail. - Online sales technologies: this includes technology used to identify and target customers and analyze consumption patterns. - Infrastructure and productivity: many insurers consider cloud the best option for processing, computation, and storage. Since IT infrastructure is critical for innovation. As for productivity, tools such as coauthoring, and video calls can be used to connect with customers. - Imaginea (innovation consulting company) also identifies machine learning, big data and predictive analytics, and virtual reality as among the key emerging technologies that are set to disrupt the insurance industry. In addition, it has identified two other key technology trends; robotic process automation that can be used to automate mundane tasks such as claims settlement and data management, and also artificial intelligence, which can be used for facial recognition in underwriting, and providing a personalized customer experience.
Current technology trends
- According to Accenture, the insurance technology trends for 2019 are:
-Distributed ledger technology, AI, extended reality, and quantum computing (DARQ) are among the key technologies that are currently in the process of disrupting the market. 93% of respondents are already experimenting with DARQ technologies. -Using technology to deliver a personalized customer experience. 82% of insurers say that digital demographics are expanding ways to deliver products and services to their customers. -The need for increased security within the ecosystem. 88% of insurance executives agree that they must rethink their security strategy that covers their entire ecosystem. -The need to reinvent the organization to deliver customized on-demand products and services. 90% agree that customized, on-time delivery is the next wave of achieving a competitive advantage and 63% believe that 5G will have a significant impact on the industry within the next 3 years. - According to KPMG, the current trends in insurtech include (among others): AI and machine learning, risk reduction through data and analytics, and the need for a customer-centric digital-first approach.
Proposed next steps:
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