Reshaping Insurance Via 'Convergence'

The initial phases of “smart” saw many objects becoming connected; now, they are adding intelligence.


The world is at an inflection point, with emerging technologies poised to change every aspect of our lives and businesses. Exactly how each industry will be transformed and how insurance will be affected is difficult to predict. However, a number of key trends are gaining prominence, and the implications for insurance are so significant that they bear close watching. SMA’s recently released research report, 2017 Emerging Tech Landscape: Implications for Insurance, identifies those key trends and discusses the developments in eight emerging technologies that have big repercussions for insurance. Two trends, in particular, warrant special consideration:

Objects are moving from smart to intelligent.

The initial phases of “smart” saw many objects becoming smart and connected, such that their activity and the environment around them could be monitored and measured. Now, more things of the IoT are leveraging artificial intelligence to make recommendations and even to make decisions and take actions autonomously. This is true of vehicles, homes/buildings, wearables and many other areas.

Convergence: Insurance in 2017  

Convergence drives value.

The combination, or convergence, of multiple technologies, both new and old, is now underway in a quest to create new value for customers. Technologies such as the IoT, AI, mobile and cloud are being integrated in new ways to provide solutions to the problems of individuals and businesses.

Many emerging technologies are advancing so rapidly that keeping track of them all is a full-time job. The sheer number of companies, products and solutions based on emerging tech that are materializing every day is staggering.

These advancements and announcements will affect insurance in one of three primary ways. Some will enable operational efficiencies and processes, such as artificial intelligence, drones and blockchain. Others will offer new options for rethinking the customer’s experience. Wearables, the IoT and new payment technologies are examples of tech with important implications for customers.

The third manner in which emerging tech will alter insurance will be to change the very nature of risk. Many of these new technologies have great potential to reduce risks of all types for all lines of business. Alternatively, new risks are being introduced, some of which are visible and predictable, while others will be unexpected. Autonomous vehicles come to mind as an area with tremendous promise to reduce accidents. Robotics and wearables can also help remove individuals from unsafe environments or allow for rapid reaction when disaster strikes.

See also: The Great AI Race in Insurance Innovation

The insurance industry is not sitting idly by and watching these changes unfold. Insurers are investing, partnering, piloting, reorganizing and launching initiatives at a pace that is unprecedented in the industry. For example, 41% of insurers say they are actively pursuing partnerships outside the traditional industry boundaries. Innovation initiatives are widespread and have almost become table stakes. The industry is at the front edge of a major transformation, and emerging technologies are a big factor in driving and shaping the change that is underway.

Mark Breading

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Mark Breading

Mark Breading is a partner at Strategy Meets Action, a Resource Pro company that helps insurers develop and validate their IT strategies and plans, better understand how their investments measure up in today's highly competitive environment and gain clarity on solution options and vendor selection.


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