The insurance industry has undergone a transformation over the past five years. Once manual and paper-based, insurance professionals now recognize the overwhelmingly positive impact technology has had on efficiency and customer relationships.
We can expect the acceleration of tech-enabled customer experiences that promote dynamic customer interactions and empower the insurance industry to deliver tailored solutions and products to meet customers’ personal risk advisory needs. Here are a few of the innovations we will see take off in 2020.
- Pay-as-you-go car insurance. This unique approach to car insurance is especially appealing for urban consumers who own a car but rarely drive it. Rather than forcing occasional drivers to spend money on the same caliber of coverage as someone who drives every day, on-demand insurance means car owners can activate coverage only when they need it or pay per mile. The program requires a significant investment in technology that provides direct, self-service options for consumers, but we’ve already seen Liberty Mutual and Metromile offer this flexibility. We can expect many of the larger brands to begin offering similar options.
- Self-service capabilities. Sometimes it’s just not feasible to call an agent when a need or question arises. Modern consumers increasingly want the convenience of DIY options to allow them to secure coverage or access information on their own schedule. To meet that demand, we’ll see self-service portals offer a wider range of features, including risk rating, on-demand premium quotes, home inventory solutions and claims processing. There’s also a growing demand for virtual adjuster technology and drone/satellite integration that help speed claims processes. Many agencies aren’t aware that their carrier partners even offer these tools, so be sure to ask.
- Smart home claim avoidance/prevention tech. You’re probably already familiar with tools that track driving habits and offer discounts on auto insurance. A similar tech is emerging to help homeowners head off costly insurance claims on some of the most common mishaps. For example, a large portion of claims are related to water damage, such as a pipe bursting or an old water heater that fails. By implementing smart home sensors, automated controls and other Internet of Things devices, insurers can help homeowners mitigate the damage. For example, a sensor installed on a water heater can help monitor its structural integrity and remaining useful life, giving homeowners a heads up if it looks like a leak is imminent. In addition to offering premium discounts for participating in such a program, carriers might also provide incentives for replacing risky appliances ahead of time to avoid the risk of claim. Other solutions might involve installing a flood sensor or automated water control valve, which would send a mobile notification if a pipe bursts while no one is home, or even automatically shut off the water to prevent major damage. Some carriers already offer smart home kits for free to avoid these types of claims, and, while some homeowners might be a little concerned about privacy issues at first, I expect we’ll see this become table stakes soon.
- Deeper data insights to drive business growth. With threats of a potential economic slowdown beginning to percolate, we’re starting to see signs of a hardening of the market in commercial lines. In many cases, premiums are rising, and business customers are looking at all options to save money and reduce costs. Agencies need quantifiable data and insights from smart analytics to help commercial customers strike the right balance of risk, coverage and cost.
That means the demand for industry-wide data analysis will grow substantially, as agents and carriers need measurable and accurate insight into what’s going on across industries — what customers in similar business sectors are buying, what the risks are and what are any potential gaps in coverage. Combined with their experience and knowledge, comprehensive industry analysis tools will enable agents to see the big picture and give business customers data-backed recommendations to ensure they receive just-right coverage.
See also: Is Insurtech a Game Changer? It Sure Is
The future is tech-enabled
In the coming year and well beyond, consumers will increasingly demand greater transparency, a higher level of service, and on-demand solutions from their insurance carriers and agents. This means adopting innovative technology will become a norm rather than a novelty as the industry digitizes to provide a more modern experience.
The good news: A wide array of insurtech solutions are now available, providing accessible and affordable tools for even the smallest independent agencies. Adopting insurtech solutions can not only improve agency efficiency, allowing agents to spend more time with customers, but also help agencies spot opportunities for growth. This powerful combination can deliver substantial ROI for investment and position your agency as a modern, tech-savvy partner for both consumer and commercial customers.