The insurance industry used to be a tech laggard. No more. Though there’s still much work to be done, most insurers are now better positioned to capitalize on their investment in technology.
Here are eight key technology trends that continue to shape the industry.
1. Greater stress on cybersecurity
An Ernst & Young security survey revealed that 59% of respondents had encountered a significant cybersecurity incident in their organization. Because insurers store so much sensitive personal and business data, they’re a prime target.
Cybersecurity strategy should be focused on proactive measures rather than reactive strategies. Cyber-crooks are relentless and inventive. Security has to be a top priority for insurers of all types and sizes.
2. Filling a gap in employee benefits automation
While group proposals and policy administration are both well automated, between the two comes group onboarding, which has not been automated.
But solutions are being developed and implemented. Onboarding solutions will be built on automated data capture and importing. Data integrity is crucial. Employee information must be correct and complete when entered.
The solution must also offer robust data security and comply with privacy regulations to securely to gather and store employee information. Flexibility is also mandatory because integrating onboarding closely with both proposal and policy systems is essential to efficient workflow.
3. Cloud computing grows
Cloud computing will continue to be adopted widely by insurers and insurtech providers as it is cost-effective, speedy, and flexible. Cloud providers will continue to improve their technology to deliver sophisticated capabilities.
The security risks associated with housing data off-site via a third-party, however, can present challenges. While cloud storage companies are expected to protect data, ultimately insurance IT departments are responsible for their cybersecurity. That requires constant vigilance, hiring skilled people and spending enough money.
4. Internet of things and Big Data become more important
IoT continues to become more useful. Insurers can use real-time data to meet and enhance business objectives. This can boost efficiency and revenue and promote better customer service.
As the Big Data revolution continues to expand, IoT adoption in the insurance industry is expected to grow. It will enable collection of data in real time, resulting in lower premiums for insureds willing to participate. There will be ongoing adoption of connected devices for loss prevention and pricing in property-casualty, life and health insurance.
5. Analytics advance
Analytics can transform Big Data into actionable insights. As analytics and data science advance, insurers can better extract value from the huge amounts of data that now exist. Insurers can then leverage on the sophisticated information analytics to gain a competitive edge in the market.
For insurtech providers, there is a huge opportunity in the coming years to develop advanced analytical technologies that can make sense of unstructured data such as real-time video, social posts and live blogging.
6. Artificial intelligence: the future is here
In 2018, more insurance and insurtech companies found effective ways to integrate AI. In 2019, companies will complement a significant part of their structured data decision-making with AI data analysis and decision-making.
Robotic process automation will begin to gain a wider application facilitating automation of repetitive processes across the entire IT infrastructure. Robotics and AI can offer improved productivity, shortened cycle times and better compliance and accuracy.
7. Augmented reality blooms
Augmented reality is starting to have a presence in insurance. An article by software development company Jasoren identifies several AR use cases, such as using it to warn of risks, explain insurance plans, estimate damages and increase brand awareness. Alternate forms of AR such as virtual reality, mixed reality, and extended reality are shaping AR how it is being used.
8. Blockchain evolves
The technology behind cryptocurrencies will be adopted for more promising applications. They include “smart” contracts, and secure decentralized data collection, processing and dissemination. While I do not expect to see a full-scale implementation of blockchain technology any time soon, many insurers, and insurtech companies are in the process of launching projects and initiatives to test its applicability and effectiveness for insurance, especially claims.