As technology advances, the insurance business is witnessing an important and unprecedented disruption. Policyholders expect carriers to handle claims faster, better and more efficiently than ever before. Because of this, nearly all (89%) of insurance companies expect to compete on customer experience, versus only 36% four years ago. These changes are spurring unprecedented levels of innovation in the insurtech space.
Let’s explore three insurance claims cycle trends that will change the way our industry operates:
Trend #1 – Decreasing Claims Volumes
Technology is making things safer – from driving automobiles to building houses. In automobiles, collision avoidance systems are projected to reduce auto claims by 8%. Plus, innovations such as rear-view cameras, safer designs and better brakes are reducing claims overall.
See also: How to Respond to Industry Disruption
Trend #2 – Catastrophe Support
Catastrophes and natural disasters create difficult times both for insurers and policyholders. Hurricanes Irma and Harvey remind us of this somber reality. Recognizing the difficulty that catastrophes create, many insurers have created catastrophe response teams to resolve claims quickly. These teams can now leverage insurtech innovations such as electronic claims filing to deal with catastrophe claims more quickly and help put people’s lives back in order. The use of drone technology in the insurance supply chain has also improved our ability to know what’s true after natural disasters strike.
Trend #3 – Increasing Use of Sensors
Through the Internet of Things (IoT), smart sensors are becoming more prominent across all insurance channels. Sensors monitor data and inform insurers and policyholders if certain risks are increasing. For example, Progressive’s Snapshot sensor monitors driving behavior.
Home sensors can detect risks such as heat, moisture and sound. Consider NoiseAware, which allows short-term rental hosts to monitor decibel levels in their homes to deter large, noisy gatherings that can be distracting to neighbors and also lead to damage.
Because sensors can reduce claims, they can also reduce premiums. This is favorable to insurance customers. In fact, according to one source, 78% of insurance customers are open to using sensors if they decrease premiums.
See also: Preparing for Future Disruption…
It is clear that technology is reshaping the insurance supply chain. This poses many challenges, but also offers many opportunities. Reduced claim volumes, improved catastrophe response and increased sensor usage will all change the way carriers underwrite, sell and settle. It’s critical for insurers to monitor and respond to these trends as technology continues to evolve.
Stay tuned for part two of our series, where we’ll explore three additional disruptive trends.