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Digitisation: what does it mean for your business?

01 April 2017

Technology has been a major influencer in the insurance industry over the last few years.

We are now presented with a conundrum; do we adapt or do we carry on with business as usual? Digitisation is proving to be a major influencer in the insurance and financial services industry and requires all of us to take a step back and ask: what does digitisation really mean for my business?

Trends we should know about
Speaking at the recently held Digitisation in Insurance Conference, Lee Naik – CEO of TransUnion – said that in order to answer this question, we need to establish what needs to be done to drive our business forward in order to remain relevant.

“The one thing that is changing in the industry is that everybody is talking about Big Data. By 2020, there will be 50 billion connected devices in the world, and we need to see how we get the information from these devises and use them to our advantage,” said Naik.

Sensors in these connected devises will determine how clients interact with the world and can tell insurers, and brokers, a lot about them and their habits.

Internet through Things
The broad term to describe the devices described above is the Internet of Things (IoT). However, Naik believes that we need to stop referring to IoT and rather refer to the Internet through Things because connectivity permeates everything we do in the world.

This is becoming possible through artificial intelligence which is taking over the world one small step at a time. By the end of the year, the United Arab Emirates will be launching passenger drones which will pick people up and transport them from one location to another. We need to ask ourselves what this, and driverless cars, will mean for the future of insurance.

“Day to day jobs will be taken over by robots. Statistics show that by 2057, 47% of the jobs that are currently in the industry will no longer exist. This will possibly affect rules based jobs the most,” said Naik. Just think how this will affect underwriters and those who price risks within insurers.

A new frame of reference
The way we look at insurance is also being changed and challenged by technology. Telematics companies came out with apps that you install on a smartphone which monitors your driving behaviour. This was good in a world where people mainly used their cars to travel to different places. However, in a world where people increasingly make use Uber to get to meetings and social events, can we say that these telematics apps are still relevant, or do they need to be modified?

“Companies need to look at their products and services as a commodity. If you have a good product or services, competitors will catch up to you and try to offer the products and services you currently offer in a better way. What are you doing to win the hearts and minds of your clients? What is your hook?” asked Naik.

Blurred lines
Naik said that insurers and brokers need to start selling client experiences. Technology, through Augmented Reality and Virtual Reality, are changing the game.

Augmented reality is a live direct or indirect view of a physical, real-world environment whose elements are augmented (or supplemented) by computer-generated sensory input. Gamify insurance to show clients the risks they will face and sell products accordingly. For example, if a person is travelling into Africa where Yellow Fever is a risk, show clients detailed videos about yellow fever that discuss symptoms, and what it is like to suffer from the disease. Then sell travel insurance.

Virtual reality typically refers to computer technology that uses virtual reality headsets to generate the realistic images. Again, gamify your product offering and sell accordingly.

Humans need to work alongside technology in order to make products and services creative enough to entice clients. It allows us to maximise our offerings and to explain complex things in simple ways.

 

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