Trendy technology : transforming tomorrow

It is only 2016 and already we are beginning to see one of the main evolutionary trends of the sector.

In recent years, we have seen major shifts and trends that are pointing to where the insurance industry is heading in the future.

Common trends

The insurer’s value proposition has had a transformational impact on the insurance industry due to the integration of technology, and will continue to do so over the forthcoming years.
Most of the trends in the insurance industry are either technology related or have technology as a main driver, creating digital transformation and mass innovation. The common trends are:

Trend 1: The Internet of Things

The Internet of Things (IoT) refers to a network of physical objects that contain embedded technology to gather information about specific objects and also has the ability to transmit information. Improved communication methods and increased data processing power along with the decreasing cost of sensors have enabled the widespread adoption of IoT by society.

Trend 2: Usage-Based Insurance

Auto-insurers are now focusing on Usage-Based Insurance (UBI), setting the rating of the premium on usage and/or driving behaviour in motion. Due to the spike in smartphone capabilities along with the introduction of connected cars, these telematics devices and systems are driving us forward.

Trend 3: Big Data

Big Data can be defined as high-volume, variety, velocity, value and veracity of information resources that provide new insights and enable better decision-making, leveraging innovative data processing techniques.These days, customers demand quick and seamless claims processing, forcing insurers to make this process faster and become more proactive in eliminating fraudulent claims.

Trend 4: Gamification

Gamification uses game mechanics such as points, challenges, leader boards and incentives in real life scenarios to motivate the audience to an increased level of engagement.

Improving customer engagement and loyalty is one of the focus points for the insurance industry in an era of increased competition. Better customer engagement will also enable insurers to better assess their customers’ risk profile and by doing so, enhancing the customers’ experience and satisfaction.

Trend 5: Cyber insurance

As more businesses want to protect themselves from unforeseen cyber-attacks, the demand for cyber insurance is growing exponentially.

As cyber-attacks cannot be completely eliminated, so the best option for businesses is to pay a premium and transfer the risk of a cyber-attack.

Fast pace change

Those who identify the potential of these new technologies, trends and technological progress at an early stage, have a competitive advantage and will be able to build the foundation for innovation.

As increased innovations occur on these trends, they will help to create new business avenues and/or provide enhanced customer service and satisfaction.

More insurers are transforming into a digital business and interacting directly with customers, rather than through middlemen when most customers want to handle all of their transactions online, preferably via their smart devices.

As we start seeing the technological progress coming into play, customers will be able to get real-time, competitive quotes online; be rewarded via lower premiums through IoT devices like fitness wearables which register their efforts to lower health risks; or file a claim at the site of a car accident via smart devices.

Identifying the traditional insurers that are innovating and the technology companies that are helping them transform could mean getting an advantage in an often overlooked industry on the brink of change.

Where to from here?

Technology is not slowing down and waiting on insurance to catch up, customers will be ready and waiting to purchase protection once the industry joins the party.

If traditional insurers do not join the party, there will always be newcomers who see a gap in the market and will take the opportunity to disrupt the industry. These disruptors could well come from outside the traditional insurance industry.