The world is abuzz with the potential of a new wave of emerging technologies aimed at transforming business, society, and our daily lives. Every day, there are new developments in wearables, drones, autonomous vehicles, the Internet of Things, virtual reality, and a host of others. And the pace is accelerating. Our world will look different 10, or even 5 years from now. It is very important for insurers to ask how these emerging technologies will impact insurance – an industry considered to be stuck in the past.
Emerging technologies and trends are sure to influence two key dimensions in insurance: the customer experience and innovation. Insurers have lately pivoted toward the customer, launching major investments and initiatives after years of slow progress. Many leading companies are aggressively pursuing innovation agendas to reinvent their businesses. Many aspects will change … distribution channels, products, risk assessment, and business models. The major driver behind all of this change is customer expectation, fueled by emerging technologies, and enabled by innovation.
Emerging Technologies and Trends
Insurers are highly focused on eight emerging technologies for the near term; with an additional four expected to impact the industry later. The top priority emerging techs today for both P&C and L&A are new payment technologies, the IoT, wearables, and artificial intelligence. P&C also likes drones and autonomous vehicles, while L&A is using semantic technologies and watching biotechnology/genomics. Others with rising potential include 3D printing, augmented/virtual reality, gamification, and advanced robotics.
A Paradigm Shift in the Customer Experience
Historically, insurance customer interactions were few. Maturing technologies like mobile and analytics are already offering new ways for policyholders to communicate with agents and insurers. But, the next wave of changes driven by emerging technologies has the potential to completely change the experience, especially in the following ways.
- Nature of interactions: The connected world offers new opportunities to collaborate with customers on managing risk and investments.
- Frequency of interactions: Interactions between a policyholder and insurer will increase from monthly, quarterly, or annually to daily within five years.
- Intelligence of interactions: Real-time data, along with sophisticated analytics will enable more intelligent, personalized, and actionable interactions.
Innovation: From Ideation to Implementation
Many insurers have ideas about the opportunities and challenges created by emerging technologies and trends. The difficulty lies in identifying specific business use cases in which emerging tech can be implemented and yield measureable results. This is where innovation comes into play. For innovation to truly drive transformation and success, it must go beyond desire, thought, and vision. To move from ideation to implementation means that there must be a sustained commitment, emanating from the top of the business, that promotes and cultivates the projects and investments that will enact change.
It is a fascinating time to be in the insurance industry – full of opportunities, threats, and a changing landscape. Insurers should continue to leverage maturing technologies. But the real transformation is just beginning, with emerging technologies setting the stage and innovation playing a starring role. The winners will be those that embrace the opportunities to leverage new technologies to rethink and reimagine their products and business models and create brand new ways to interact with customers.
Editor’s Note: Mark is a partner at Strategy Meets Action (SMA). He specializes in customer experience, analytics, digital content management, and maturing and emerging technologies. Exclusively serving the insurance industry, SMA) is an advisory services firm offering retainers, research, consulting, events, and innovation offerings to both insurance companies and solution providers