In light of recent advancements in technology, the insurance industry, among other traditional sectors, has been experiencing tremendous disruptions. Mass adoption has been taking place and the insurance industry can no longer afford to be left in the dust. With the advent of automation, most repetitive tasks have become obsolete, leaving room for businesses to focus on what really matters.
2019 has been forecasted to be the year where AI really takes off in terms of presenting new, previously inconceivable, opportunities for insurers and customers alike. That said, it would be naïve to think that all businesses and individuals would benefit from this recent development equally.
Approximately 7 out of 10 insurers these days have moved to the cloud to keep their insurance business from lagging behind. A few years ago, the cloud might have been a concept that could have been easily dismissed as just one with undue hype, but it has since proven to be a technology that is imperative to a business’ success.
Previously, cloud computing was deemed effective purely for cost savings. In recent times, however, it has been proven useful for speed, scalability, and even flexibility. Insurers are now under severe pressure to go digital and start developing applications for the cloud to improve their speed of deployments.
It is forecasted that in 2019, the global cloud computing market, which includes business services, cloud platforms, and SaaS products, will grow to exceed $200 million in value.
The distributed ledger that is blockchain is touted as the best way to ensure data security in this era of security breaches. This is because all the data is stored and distributed across an extensive network, leaving little room for any one entity to easily obtain the entire record as it is decentralized on millions of servers around the world.
Big Data will come into the forefront in 2019 simply because there are billions of insights that are just waiting to be discovered if used properly.
Big Data is the complex process of analyzing large and diverse data sets of structured or unstructured data for unknown correlations, hidden patterns, customer preferences, and unique market trends. All these insights combined could ultimately help organizations make better informed and more strategic business decisions.
Internet of Things (IoT)
Along with the digitization of our lives, consumer behaviour seems to be changing as well. Insurers can now easily calculate the lifetime risk of each customer by monitoring their regular activities through the use of smart devices that are connected to their bodies.
Insurers are able to offer discounts to customers who have linked their insurance policies to their smart devices. This is because insurers can minimize their risk, since they are updated on a customer’s health, driving behaviour, or how careful they are with their home security in real-time.
AI has been around for a while but had previously gone under the radar. Its real-world applications include autopilot technology for flights, spam filters for emails, and autonomous vehicles, to name a few. AI can assist insurers in running their business by providing chatbot services or through advanced algorithms. These algorithms enable AI to streamline back-office operations for insurers, making it a useful tool to boost revenue with.
As technology evolves, so too does the type of crime that is committed using the internet. A host of studies have demonstrated that cybercrime costs approximately 0.8% of the world’s GDP, which amounts to $600 billion every year.
The rise in cybercrime has prompted regulators to develop risk management protocols for all industries to follow. It has been forecasted that more than 2,000 insurance carriers in the US alone have attained growth by remaining compliant with proposed and existing cyber regulations. It is no surprise then that it will be a concept we should keep an eye on in 2019.
GDPR & Other Laws
GDPR is also known as a General Data Protection Regulation. These laws are responsible for controlling how companies collect, store, and process consumer data for citizens of the EU or for companies that operate within that jurisdiction.
Insurance firms would be wise to comply with these data privacy laws given that the trend for consumers to battle for their right to privacy will only grow stronger in 2019.
All in all, technologies are being developed every day to help further business bottom lines and profitability in every way. 2019 is expected to see more use cases for technologies like AI, blockchain, Big Data, and cloud computing in the insurance industry. As these technologies continue to evolve, it is only fitting that their increasing adoption will result in making older models obsolete. So, insurance companies need to play it smart and move to incorporating these technologies into their everyday operations if they plan on staying relevant in their respective markets in 2019 and the foreseeable future.