With people everywhere living for longer periods of time than ever before, and with political instability and a changing climate leading many to worry about their health, it’s a good time to discuss the future of the insurance industry and how it’s set to change over the forthcoming few years. The onslaught of the digital era has been immensely disruptive for insurance providers; whether they’re dealing with newfangled technology like artificial intelligence or trying to appease modern, picky consumers, insurance companies are struggling to keep up with all this change.
Yet more change is just around the corner, meaning adaptation is necessary to survive. Here’s how technology will define the future of insurance, and how companies and professionals are adapting.
The robots are already here
It would be foolish to say that artificial intelligence is the future of insurance, largely because the robots are already here when it comes to our existing market. Intelligent machines have become an integral part of the existing insurance industry, with countless companies having invested sizable fortunes in data analytics and deep learning solutions over the past couple of years. As an extensive McKinsey report on the impact of AI on the future of the insurance industry makes clear, too, the software and intelligent machines currently disrupting this sector will only grow more complex sooner rather than later.
By championing machine learning and deep learning techniques, for instance, certain companies are able to make predictions much more accurately than simple humans ever could. The immense amount of data that we all generate on a daily basis has to be put to use somehow; whereas humans simply can’t process that amount of information, however, machines are capable of crunching it down to easily-digestible tidbits of insight that human insurance providers can use. Your insurance provider may deduce from data collected from your vehicle that you’re a reckless driver, for instance.
Elsewhere, data and surveillance are going to keep changing how machines impact the future of the insurance industry by becoming more intrusive elements of our lives. Humans who post on social media pages, for instance, will have their content reviewed by algorithms which can detect “harmful content” like tobacco smoking, reckless drinking, or vacations to dangerous areas. Such AI programs may be able to deduce who in an insurance pool is at particular risk of suffering certain injuries in specific parts of the world. Facebook is already using AI to scan posts for suicidal thoughts, so it’s not hard to see how insurance providers everywhere can benefit from a better look into people’s personal lives.
More so than technological changes, however, the car insurance industry may find itself grappling with new ethical boundaries derived from this intrusive technology. Some people may not want machines analyzing their driving behavior, for instance, yet providers will insist that it’s a cost-cutting innovation.
The coming privacy battles
The future of insurance is becoming defined by technology not because it’s supercharging the ability of insurers to cover more people, but rather because it’s forcing us to confront forthcoming privacy battles unlike anything we’ve previously seen. People in the future are going to justifiably feel spied upon nearly all the time; with cameras and sensors everywhere, it’s already challenging to escape the grid and diminish the ability of other people to keep tabs on you. In the future, this trend will only grow worse as the number of digital devices in the environment continues to skyrocket in response to consumer demand.
The ways that big data security problems threaten consumer privacy are well-documented, but that doesn’t mean the insurance industry is ready to go with a comprehensive response to customer fears about surveillance and over-collection of data. More insurance experts need to be asking themselves how they’ll confront the ethical challenges being brought by the digital era, as this disruptive technology doesn’t only threaten jobs and industry norms but also the privacy of millions of people. Certain tech continues to prove invaluable when it comes to insuring more people, though, so kiss any thoughts of stymieing the new industrial revolution goodbye.
Other, less formidable battles are also coming that will challenge the insurance industry. Certain interesting technologies haven’t drawn much of a buzz for themselves, for instance, yet they could stand to reshape how insurance is provided in the near-future. Virtual reality has been grabbing headlines all around the world with a promise to take us into new worlds, yet augmented reality is already providing results in the insurance industry that are by and large going under the radar. 7 use cases of augmented reality in the insurance industry today demonstrates how this and other consumer tech will be important regardless of whether industry pros are waking up to it or not.
All of this technological change will demand flexibility and ethical rigor from insurance industry professionals. Few experts are as well equipped as those in insurance to deal with digital disruption, however, so there are plenty of reasons to be positive about how technology is continuing to define the future of insurance in new and exciting ways.