How Technology Is Changing The Future Of Insurance

Like everything else, over the years insurance 

sector has undergone a paradigm shift and a metamorphosis from its original avatar. Today, technology has bridged the gap between an insurance company and the insured via digital revolution where online aggregators have made the insurance sector more transparent, accessible and easy to understand. But the march of technology will not end here. As there are continued advancements in this field, it is but obvious that the insurance sector too will be impacted by changing technology and its demands. This blog explores that aspect.

The first and foremost impact which is already manifesting itself is the digital revolution which has led insurance companies to interact and deal directly with their customers, rather than  go down the traditional route of interfacing via middlemen. The emergence of online aggregators is already proof of that fact. Thanks to technology, insurance business is now more accessible and it is convenient to buy a policy at just the click of a button. What’s more is that the prospective customer has the advantage of comparing the pros and cons of each policy along with sizing up which premiums are low and suit his budget the best.

The other most impactful change is that insurers are now offering mobile applications which are helpful in reporting claims and accessing information. For example if a car is involved in an accident, the car owner can now immediately transmit the accident picture live, thereby speeding up the process of filing the claim in a big way. This could well be a common scenario, for the future.

Thanks to major advances in software and hardware, insurance companies are now witnessing a major surge in data collection that is translating into higher business returns. For instance, the process of underwriting, which depends on individual risk assessment which sets the premium pricing is impacted in a big way. Now, customer data is providing actionable insights resulting in improving the customer experience.

One of the most interesting trends unfolding itself in the insurance sector is probably the rewriting of some traditional insurance methods. Take the concept of self-driven cars.The question is when cars are in a futuristic scenario where most of the functioning is based on software that works on certain formulae and algorithms, if something goes wrong who will be held responsible? Will the car manufacturer take responsibility or will the onus rest on the shoulders of the person driving the car? The insurance industry, software companies and the car manufacturers will have a lot to think about and consider. The other aspect of auto driven cars is that the number of accidents and cases of drunken driving will reduce drastically. Severity of accidents is also expected to reduce in this scenario thereby bringing down insurance costs. But natural factors like cars being damaged due to floods, cyclone, earthquakes and other calamities could still be a risk to auto driven cars. These factors could potentially impact the underwriting business and usher in technology driven and related changes.