The Future of the Insurance Industry Amidst the Technological Evolution

The Future of the Insurance Industry Amidst the Technological Evolution

By Shehwar Ali

With the advent of technology, a number of technological concepts like big data analytics and the Internet of Things are predicted to be the next big disruptor for the insurance industry. In shaping the future of this industry, a number of other factors, as well, will influence its progress in the long run including demographic shifts, changing customer behaviours and shifting trends in the market. Today’s goal, for insurers, is to keep up with all the new technologies coming forth so as to ensure a future role in an increasingly unpredictable industry.

Big Data a Big Plus?

After the most recent wave of automation, new technological advances have led to enhanced operational efficiencies, increased revenue opportunities and last, but not the least, an improved customer experience. The major developments in the insurance industry are the abrupt increase in the growth of electronic devices i.e. smartphones and tablets coupled with cloud computing. Apart from that, immense data storage and computing power now available have resulted in the accumulation and analysis of real time data aka big data.

The increased availability of internet devices and sensors will eventually affect the availability of real time data. In order to have a competitive advantage over their peers, insurers can employ this information in many things including improved pricing and loss control.

Employing Artificial Intelligence to Make Strategic Decisions

For the processing of voluminous data (unstructured and multimedia data), the capabilities to process will be achieved in the near future using analytical techniques. With the advances in software and hardware, big data translation into actionable insights can be made possible. The use of analytical techniques to process big data for decision making processes is already being used. Through the likely developments in artificial intelligence, also known as machine learning, by 2020 insurers will be able to make use of unstructured data which will help in making strategic decisions.

Without a doubt, however, as all insurance-related activities are becoming automatable, the industry might face another problem in keeping employees with the digital expertise to overlook all operations.

What Should Insurers Be Doing?

Resetting priorities with the focus to accommodate the digital transformations according to new trends is what is required from insurers. In a recent report “Automating the insurance industry”, McKinsey & Co. reported that the retraining and redeployment of talent should be a top priority as this automation process as a whole will change the majority of occupations. Also, with digitization and machine learning, it is estimated that:

– Up to 45% of all of the work activities in the US can be automated, with another 13% increase in automation possible with some further improvements in understanding natural language.

– Up to 30% of the work of sales agents is likely to be automated.

– About 35% of the work of underwriters may be carried out by computers.

– CEOs will not be that immune either since computers could easily do 25% of their tasks too.

Thus, as the world as a whole is shifting towards a more automated way of life, it is essential that insurers stay ahead of the game and rethink their priorities today.

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