Technology is reshaping the future of insurance in diverse ways starting from how we think about it and creating new experiences for both insurers & insureds. The numbers speak volumes – a whopping $5.45 billion (about $17 per person in the US) (about $17 per person in the US) global market value in 2022, and it’s set to skyrocket with a more than 50% annual growth rate from 2023 to 2030.
What’s fueling this surge? Let’s break it down without tech talk. We’ve got embedded insurance – insurance seamlessly integrated into your daily life. Then there are user-friendly digital tools, making your insurance journey smoother. Throw in telematics and IoT, bringing connectivity into the picture. Plus, we’re relying on data and letting AI and machine learning do the heavy lifting.
In this blog, we’re digging into these five trends to show you how they’re changing the insurance game in 2024.
It’s not just about catching up; it’s about staying ahead in a world where technology is steering the wheel of change.
Rich data sets
In the insurance world, having good, organized data is key. Think of it like having a clean slate for making decisions.
Now, why does this matter? Messy data, like missing or old info, can mess up how you figure out risks and decide on prices. It’s like trying to solve a puzzle with missing pieces. Not great, especially when insurers need the full picture to help clients with prices and coverage.
Even the small details matter. Like, is it a barber shop or a beauty salon? Small, but it makes a big difference in what you pay. So, for insurance folks to do their job well and make those computer models smarter, we need data that’s good and accurate.
But how do we keep it in check? Well, there are tools that double-check the data, or you can get customers involved. Let them look at what you’ve got. Why bother? Cause clean data isn’t just about avoiding repeats; it’s about getting the prices right, cutting down on boring manual work, and making sure customers trust the info you’re giving them.
Increased AI adoption
Survey says most insurance folks are really into AI, with a whopping 90% planning to invest more in it. Three-fourths of them are putting their money on AI for figuring out insurance prices and managing claims. AI can make things faster and cheaper, like giving quotes quicker and sorting out claims faster.
Also, around 25% of those surveyed are checking out something called Generative AI. It’s like a smart helper that can create new stuff based on what it’s learned before. For insurance, it could mean automating tasks like summarizing medical notes or handling simple applications and claims.
Our take on this? Well, the survey proves AI is a big deal for insurers to be better at their jobs. It’s not taking over humans – think of it more like a super-smart assistant. AI helps insurers make smarter choices and reduce risks. But let’s be clear, it doesn’t replace human know-how. Combining AI and human smarts makes decisions more balanced and trustworthy for insurers. It’s like having a tag team of digital and human brains working together.
Embedded Insurance
People want insurance, that’s quick and easy, right? But buying insurance can be a hassle. Now, insurance companies are making it smoother. They’re putting their insurance deals right where you buy stuff, using something called APIs. So, when you’re shopping, bam, there’s the insurance option.
It’s not just for travel now. Companies like Tesla and GM Motors are jumping on the bandwagon. Tesla was the first to offer car insurance right when you buy a car, thanks to fancy tech called telematics. GM does something similar. Plus, with these embedded deals, they can keep an eye on how you drive and give you perks or change your monthly payment based on that.
This isn’t just about making things easier for customers. It’s also making insurance reach more people, expanding the market.
Customer-Facing Digital Tools
In 2024, it’s all about making customers happy. That’s why businesses are focusing on what customers want. For insurance, it means making everything simple and personal – from buying to renewing. See, lots of insurance products are similar, so companies need to stand out. How? By using cool tech.
Imagine easy phone apps, online tools for claims, and smart documents you can sign online. These things make insurance companies look good. McKinsey says companies using tech to make customers happy can boost satisfaction by 15% to 20%. So, it’s not just good for customers, it’s good for business too.
Use of telematics & IoT
Telematic devices are like little helpers that keep an eye on how you drive, giving personalized safety tips and info on your driving habits. Big players like Allstate, GM, and Tesla are even using this data to tweak your insurance costs based on how you drive. Plus, super-advanced telematics can also catch real-time data on accidents and spot fraud by looking at things like sudden braking, sharp turns, or speeding during a specific time.
Then there’s IoT (that’s Internet of Things) making telematics even fancier, especially for managing groups of vehicles, like in a company’s fleet. IoT sensors join the party and smoothly mix in with fleet management systems. This combo gives a quick look at important info like how much fuel is used, if the engine is okay, where the vehicle is, how the driver behaves, and the history of vehicle maintenance.
All this detailed data helps insurance companies make smarter choices about who they cover and design insurance plans that match what people really need. It’s like having a bunch of super smart tools that make insurance work better for everyone.
