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Acceleration of change

01 April 2017 Tial Technologies
Thomas Kieck, Business Development Director at Tial Technologies

Thomas Kieck, Business Development Director at Tial Technologies

Whilst traditionally the insurance industry has remained largely unaffected by technological changes, current trends will shake up and transform the industry.

As technological changes continue to accelerate, customers have embraced them and already expect to research, shop and transact seamlessly across multiple channels.

The always-connected customer

Insurers are operating in this always-on always-connected environment where customers’ expectations and technologies available to meet them are evolving ever-so rapidly.

The advances in digital technology not only provide new methods to reach out and connect with our customers, but also allow insurers to create new imperatives as customers demand greater digital sophistication from the organisations they do business with.

Three disruptive technologies

An article on ‘Capgemini World Insurance Report 2016 Reflection: Will connected technology disrupt Insurance?’ written by James Taylor states that consumers are already subconsciously adapting to multiple Internet of Things (IoT) related influences, giving us greater control to better our lifestyle.

Three key pieces of technology will potentially change insurance business models in the coming future.

1. Connected ecosystems: These are physical products, for example, the current home ecosystem could have products like a garage door, thermostat or a smoke alarm. In a connected ecosystem, these everyday products gain a digital capability, enabling them to operate without human control, but capitalise on mirroring our human activity to manage user needs. For example, if your home were to be broken into, you can remotely access your home security system from anywhere via an app and an alarm system will be able to alert you, the authorities and your insurer. Surely having this tech in place should impact premiums?
2. Wearable devices: These are technology products that can be worn and they provide some features like tracking health and fitness or GPS capability, together with a number of other technologies like Google Glasses, Samsung Gear VR or Quell Pain Relief. The next generation of wearable devices is anticipated to be embedded into the human body which could help manage our eating habits, major health issues, and dental hygiene – an exciting prospect for insurance premiums.
3. Autonomous Devices: This is essentially machine intelligence which will enable a broad range of objects like cars, drones and robots to make decisions and perform tasks on behalf of humans. One good example of this is driverless cars, which have the capability to park, avoid traffic and navigate to places such as a petrol station independently. However, recent incidents involving Google’s driverless car suggests that there is still quite some work to do!

According to the Capgemini 2016 World Insurance Report, IoT provides an opportunity for traditional insurers to ‘create meaningful, technology-based connections with consumers,' given they embrace the change required to deliver this.

Engaging the connected customer

As customers readily switch provider in pursuit of the lowest premium, the focus on price has left many lines of profitability unknown.

Improvement of customer loyalty is key to reversing the churn rates and increase of profitability, yet insurers have few opportunities to interact with customers to earn this loyalty. Claims however, is an obvious “moment of truth” when organisations have the opportunity to impress through excellent service but for most customers, the only touch point is the once-a-year policy renewal.

The digital revolution

As the digital revolution continues to grow, customers are connected in a way that they have never been before; connected devices and sensors are reshaping our world, and with it, the insurance industry.

Insurers will need new capabilities in multiple areas, including data management, processes, customer-centricity and communication management, incorporating technology in every aspect of their organisation in order to succeed in this market.

Insurers will need to position themselves at the heart of connected ecosystems, and make use of embedded technologies and autonomous machine intelligence, becoming risk managers, advisers and value aggregators that deliver excellent customer service every day.

 

 

 

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