13 Emerging Techs: How Insurers Are Progressing
September 15, 2016 2:57 PM
There are several different ways to categorize the emerging technologies that are impacting the insurance industry, according to SMA partner Mark Breading. His Emerging Tech in P&C Insurance: 2016 & Beyond report, discussed technologies from the physical realm, like drones and the Internet of Things, and the virtual realm, like artificial intelligence and blockchain, and evaluates how insurers are doing in incorporating them into their businesses."Although new opportunities and new value propositions often involve the combination of multiple technologies, it is still instructive to assess the technologies individually to understand which are likely to contribute most to industry transformation, where insurers are already actively engaged, and what insurer investment plans are for the future," Breading explains.
1. Internet of Things -- Power Player
Power players are technologies that have been on the radar for a couple years now, and more than 50% of the respondents to SMA's survey indicating investmentsin production or plans to leverage them. Chief among these is the Internet of Things, which Breading expects to be fully embraced by commercial lines insurers first. That's because personal lines insurers will depend on consumer adoption to fully leverage the technology, while commercial lines companies have more leeway to assign devices to customers.
2. Drones/aerial imagery -- Power Player
Six percent of insurers are already using drones, including Erie Insurance, Allstate, and USAA, mostly to help expedite the claims process. SMA predicts that "virtually every P&C insurer" will be using drones within five years.
3. Autonomous/driverless vehicles -- Power Player
Within the decade, the emergence of driverless cars will shake up insurance, Breading writes. As with the IoT, commercial insurers are likely to be impacted by the shift first, since public transportation and commmercial fleets will turn over faster.
4. New payment technologies -- Power Player
This umbrella encapsulates mobile payment solutions from Apple and Samsung, among others, as well as new currencies like Bitcoin. Mobile payments should be table stakes for insurers within five years, Breading writes.
5. Wearable Devices -- Fast Mover
"Fast Movers" are those technologies with the fastest rising profiles in the insurance industry. The first entry in this category, wearable technology, has already made inroads in life insurance, but has potential in the P&C industry, especially workers' compensation and other commercial lines that depend on employees staying safe.
6. Gamification -- Fast Mover
While a relatively high percentage of insurers is leveraging gamification, the reason it stays down a tier is that other insurers aren't planning to adopt it at a high level, Breading writes.
7. Artificial Intelligence -- Fast Mover
Several insurers have announced AI initiatives recently. SMA expects that the technology will help smooth out internal processes with more success before it becomes customer-facing en masse.
8. Semantic Technologies/Cognitive Computing -- Fast Mover
"SMA predicts that cognitive will have a major role in insurance in the future, especially for product needs analysis, underwriting, and claims fraud but the real industry impact is more than 5 years out," the report states.
9. Blockchain -- Fast Mover
This rising star is gaining a lot of attention from insurers. Potential P&C use cases include smart contracts, the exchange of sensitive documents, peer-to-peer insurance, and micro-insurance transactions.
10. Biotechnology and genomics -- Sleeping Giant
Now SMA lists four technologies that should impact the insurance industry, but are off the radar of most P&C carriers. First is biotechnology and genomics, which promise to extend lifespans, but the potential impact on the P&C industry is less clear than other lines.
11. 3D Printing -- Sleeping Giant
3D printing has the potential to impact commercial lines heavily, with increased production of prosthetics and medical devices, as well as replacement of lost, stolen or damaged items.
12. Advanced Robotics -- Sleeping Giant
"Robots have already been used in CAT situations where toxic chemicals or other dangerous conditions preclude human adjusters from getting close to the damage," Breading writes, adding that robotics and AI will transform the insurance workforce over the next 10 years.
Augmented/virtual reality -- Sleeping Giant
This technology combines with certain wearable devices to help claims adjusters and other loss-control professionals in the field.