Technology is changing the insurance industry
Despite a number of technological advancements in the insurance industry over the last 10 years, there remains a common belief that the sector is outdated. However, with the advancement of Insurtech – including wearables, automotive and smart home technology – insurers are quickly shaking off this misconception, proving that they offer more than just traditional insurance cover to policy holders.
To continue progressing, insurance companies should be looking to expand their offerings by partnering with suppliers in different industries to offer solutions-based services and connected technologies.
The Internet of Things has brought about a huge technological shift, and with ownership of connected devices rising from 35 per cent to 44 per cent over the last decade, and 64 per cent of consumers claiming to use connected devices at least once a day, this is a natural area for expansion. But there are some challenges to overcome before consumers and insurers can reap the full benefits.
Insurance is seen by many as a ‘necessity’ purchase, and the perception that insurers take money and try to avoid paying claims needs to be overcome.
Connectivity provides an opportunity for customer-centricity, adding value far beyond a basic insurance policy. This gives insurers the opportunity to be proactive rather than reactive.
For example, in the home, connected technologies allow for greater protection as well as providing tangible peace of mind. Combining insurance offerings with smart security technology for example can provide an earlier indication of issues, and the ability to intervene before the worst happens.
Consumers’ nervousness to adapt connected devices due to fear of hacking may be seen by some as a barrier. But rather than avoiding technology altogether, insurers should work closely with their customers to combat threats by running pilots and trials to identify preventative solutions, putting their minds at ease and building trust.
Consumers also remain concerned that they are being monitored or penalised through the use of connected technology, when in fact it’s there to help them, and insurers can dispel the myth that they are ‘snooping’ on customers by providing a genuine service.
For example, patients with incurable but manageable health conditions may be admitted to hospital for days or even weeks at a time without close monitoring. Through the use of connected technology and smartphone applications to keep an eye on symptoms, insurers can identify problems sooner and send a nurse to the patient’s home before it becomes an emergency. This keeps them out of hospital and avoids a claim.
While these concerns are important to consider, the benefits far outweigh the risks. From online platforms that manage multiple insurance policies in one place, to ‘black boxes’ in cars designed to improve driving skills and reduce insurance premiums, both have the ultimate goal of benefiting the end-user.
The automotive industry is another great example of this partnership-led approach in practice. Insurers in this space need to work hard to forge relationships with manufacturers to stay relevant and prove, through additional value, that they are the partner of choice.
By working with car manufacturers and using existing connected technology, insurers can anticipate when a vehicle might break down. This puts the customer’s needs first, reducing the number of breakdowns and future claims.
Although clearly there are some challenges that lie ahead, there is little doubt that connected technology, as part of a partnership-led approach, will become an absolute standard in 10 years’ time.
It is ultimately a force for good, and even something as simple as voice control can have a hugely positive impact on the customer experience and overall business growth.
Connected technology will break down barriers between service sectors and allow organisations to move into related verticals. In order to remain relevant, a partnership and ecosystem-based approach must be adopted by insurers for long lasting and prosperous customer relationships.