Needham, Mass — While the insurance industry has not typically been known for leading in technological innovation, new TowerGroup Inc. research finds that rapid advancements in technology are poised to reshape the insurance landscape over the next five to 10 years.
The TowerGroup report, titled "The Digital Chauffeur: Real-World Principles of Innovation for the Insurance Industry," addresses the technology shifts that will drive massive industry changes affecting both insurance carriers and technology vendors.
From the impact of advances in motor vehicle safety technology and the broadening use of global positioning systems, to new approaches in capturing data, forward-thinking insurers will develop fresh ways to interact with customers, agents and employees by leveraging insights into their wants and needs, says the report’s author, David West, research area director of TowerGroup's Insurance practice.
According to West, the potential impact of innovation on the insurance industry extends far beyond the use of faster computers and a browser-based customer experience.
West believes six principles will drive the insurance industry toward innovation over the next decade: changing the user interface, capturing contextual data, using technology from adjacent industries, collaborating with users, making infrastructure agile and managing risk dynamically.
For example, event data recorder technology used by manufacturers to improve the performance of air bags will see increased use by claims organizations to correctly assign fault in accidents and prevent fraud. By 2012, global positioning system technology will provide huge volumes of data that insurers can use to improve pricing accuracy—even opening the door to create dynamic pricing that varies with location risk.
This transformation will be fueled by increased investment in technology infrastructures, with spending on IT development projects by the global insurance industry rising from $1 billion (USD) in 2006 to $1.25 billion by 2010.
Source: TowerGroup Inc.
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access