Three Technology Trends that Define the Future of Insurance

Ed Largent, President, CEO and Board Chair, Westfield

Ask yourself, which cart do you use more frequently: An actual shopping cart or a virtual one? The shopping cart shift underscores how technology has changed customer shopping habits. It’s now more personal, customized, transparent and immediate. Customers want tailored experiences, and to be involved in the process, not just selecting from a menu of products. Expectation thresholds have increased while patience and accommodation levels have decreased. Consumers have become accustomed to conducting business at an incredibly fast pace, and selecting insurance is no exception. Consumers have more control than ever and are driving a lot of change in the insurance industry. The goal must be to meet customers’ expectations, which are being enriched by digital technology.

The insurance industry hasn’t experienced a major change since the explosion of digital technology. But now, disruptors and external factors are compelling insurance carriers to think and act differently, in more modern and innovative ways. The insurance product is a very mature product that is heavily regulated. That said, the service of that insurance product will continue to evolve and change as customer expectations change. More digital, mobile and simpler experiences will continue to be the theme as we go forward. Advances in artificial intelligence (AI) and the Internet of Things (IoT) are changing the way carriers view risk while at the same time, getting us closer to our customers. The big opportunity for carriers is to adapt and innovate and leverage technology to enhance and develop the products and services they offer. Forward-looking insurers are taking action and making investments that will help them become more customer-centric, improve their pricing and create operational efficiencies. It starts with fostering relationships with technology. Big data and analytics, the IoT and AI are the future of insurance.

Big Opportunities

Big data and analytics feed almost everything happening with technology in the insurance industry. Much of the opportunity lies in the amazing magnitude of data and information, and the industry’s ability to absorb, interpret and leverage it for better products, services and customer experiences. Utilizing data and analytics to evaluate options allows you to test and learn, select the best approach and deliver results that make the greatest strategic impact.

The IoT, until recently, was viewed as a futuristic concept and many insurers adopted a “wait and see” approach. The IoT provides new capabilities and pathways to new products and services. Early adopters have demonstrated how data from sensor technology, drones, and mobile devices, to name a few, have improved risk assessment and aided in loss prevention. Up until the last decade, customer behaviors and data were unavailable. Insurers relied on information that was usually anecdotal. The IoT increases accessible data, opening up big possibilities in many functions within insurance. Underwriting, Claims and Commercial insurance will all be impacted. The evolution of the IoT using real-time data is transforming how insurers assess risk, manage claims and price policies.

Under the umbrella of AI, machine learning is already impacting many business processes within insurance, such as customer service, claims management, and delivering value to customers. With customers demanding speedy service, AI is providing a seamless buying experience using chatbots that pull on customers’ geographic and social data for personalized interactions. When customers suffer a loss from an incident, a virtual claims adjuster is helping settle and pay claims faster, while simultaneously decreasing the likelihood of fraud.

The evolution of the IoT using real-time data is transforming how insurers assess risk, manage claims and price policies

Most customers evaluate the performance of insurance products and companies when they need to be paid, not when they make their purchase. The vast amounts of data being generated from AI and the IoT creates opportunity to identify valuable insights that can help customers even more to reduce losses, decrease cycle times, provide 24/7 statuses and so much more. These insights working in the background will add value to the services and products offered to customers through their entire insurance journey, selecting coverage to filing a claim.

Technology is good. Technology with great people is even better.

The future is now, and technology is driving insurance to deliver a modern consumer experience that will attract the younger generation and beyond. Insurance companies are working hard to improve nearly every part of the business but the advantage goes to the company that is prepared to sustain innovation over the long-term.

It’s an exciting time to be in insurance, and those who thrive will be the ones that embrace the technology to reinvent how they interact with and serve their customers. And while the impact of technology and data on all of our lives will continue to evolve and influence business, we need to maintain a key point of differentiation: Deep connections between people. The relationship between experts and customers are the driving force of business and that will never change. Technology can enrich relationships but people will always be at the center of a strong, lasting relationship.