Behind dishwater-gray metal desks adorned with calendar blotters, humorless salesmen slouch in a collective uniform of tidy graying haircuts, white short-sleeve oxfords that are clutched by lifeless ties, and conservative dress pants that skim non-descript brow leather shoes. Together they are orchestrating a low din from uttering premium costs, deductible figures, and policy parameters into their beige stationary phones as they page through voluminous binders of insurance intel.
This is the sort of image many may think of when they hear the phrase “insurance company.” Aged, vapid, and certainly not much fun. But insurers are working to change this prosaic reputation.
Consumers have cried for modernization in their insurance experience, and now insurance companies are answering. After all, in a time when you can access your washing machine remotely, why not your insurer? And the industry is being introduced to its first generation of digital natives. Millennials do not know a world without computers and instant gratification. They expect the latest technology in every aspect of their lives – including their insurance company.
And so, through this erupting demand, the digital evolution is advancing systemically in the insurance industry, transforming its entire value chain from underwriting to claims, product design to marketing. And it’s hitting all insurance categories: health, life, property, and automobile.
Here are just a few of the innovations the insurance industry is embracing to transform from uninteresting to innovative.
- Internet of Things (IoT)
“Connected” could be the word to epitomize the 21st century. We’re facilitating communication between devices in a way that only existed in the pages of sci-fi just 20 years ago. Now your cell phone can “talk” to your thermostat and you can watch home-monitoring footage from your laptop on the beach. Insurers are taking advantage of these innovations to lure customers: they offer discounts to those who opt for advanced monitoring systems or a compilation of connected devices and functions (“smart homes”). Some companies are even partnering with home and office surveillance businesses to further extend customer perks, such as subsidizing installations.
Telematics involve the use of devices attached to a vehicle or worn or your person (wearables) that collect data in real-time. That data is then analyzed to form a policy holder profile and, in effect, offer more customized coverage. Many auto insurance companies are employing telematics and granting willing customers discounts for good driving habits. They collect information, such as average driving speed, mileage, how quickly a driver changes lanes, braking time, etc.
- Artificial Intelligence (AI)
Machine learning. Machines that can evaluate, plan, and problem solve with human-like attributes. AI can be extremely beneficial for insurers in analyzing data gathered from other technology like the above-mentioned telematics to transform consumer risk development.
- Emerging Coverage Needs
As our world changes and evolves, so do our threats and risks. And so do coverage protection demands. The requests for cyber and data breach insurance continue to swell. The global insurance and finance corporation AIG recently reported it witnessed a 50 percent uptick in cyber insurance just since last year. And with the development of driverless cars, auto insurers are forced to re-evaluate coverage at its core.
Generally speaking, InsurTech is an assemblage of all new technology the insurance industry is employing to modernization and draw customers. New startup insurance firms using the freshest technology to create a complete high-tech, low-human involvement experience are sending tremors through the industry. From the start, they’re delivering what today’s consumers request and are reshaping the foundation of insurance practices. To keep pace with competition and preserve relevancy, traditional insurers have little choice but to adopt the same innovations.
Upload Business Continuity Management (BCM)
In a day when one of the first questions a prospective policy holder may ask is: “Do you have an app for that?”, insurers are recognizing the need to innovate and update. But they must do so strategically and carefully. All this shiny new tech isn’t free of risk and vulnerabilities. The more consumer data collected and the more ways that data is connected, the more opportunities that exist for that data to be misused and breached.
Insurers must maintain a robust business continuity management program (BCMP) that addresses every new technology and device they adopt. Plans must be developed and refined as those technologies change. Risk assessments must be diligently performed, test exercises must be conducted, and employees educated, to keep ahead of the threats that cling to innovation.
Written by Angie Longacre
As a writer for Assurance Software, Angie devotes her craft to promoting business continuity and disaster recovery awareness, and trumpeting Assurance Software’s invaluable benefits for both. When she’s not commanding the keyboard, you can find her outside for a run, searching for her next antique treasure, or lost in a good book.