Top 5 Emerging Trends Impacting Insurance in 2016

Today, nearly every industry sector is transformed by technological innovations, including insurance. Undeniable digital forces such as mobile/social/web interface, cyber insurance, gamification, data analytics, peer-to-peer insurance, customer adherence apps, telematics and automation, and evolving IT systems are creating new business avenues for the insurance industry to change the way it does business.

While the fundamentals always remain the same, insurance companies should get into evaluation mode pertaining to the latest trends cited above that will impact their business growth going forward. These competitively disruptive trends are going to become game-changers in harnessing their potential in the insurance market. The good news is that the insurance companies are ready to face significant disruption and are driven to dramatically shift towards digital transformation.

Listed below is a crisp snapshot of the top five technology trends that are impacting insurance industry this year:

Trend 1: Increased use of Wearables and Internet of Things (IoT):

Top brands in insurance sector are already leveraging Internet of things (IoT) for various purposes, including analyzing customers’ data to identify their needs and risks. They are exploring digitally-enabled capabilities to effectively personalise their products and services for their customers and grow their business. In addition, insurers can reduce turn-around time for initiating claims, offer discounts for healthy behaviour using wearables, create personalized, multi-channel customer experiences at a reduced cost, etc.

Trend 2: Shifting towards Usage-Based insurance (UBI):

Usage-Based Insurance (UBI) implements the promise of granular pricing segmentation. Auto insurers use actual driving behaviour or usage-based data as the basis to fix premiums. Insurers can have improved pricing accuracy for customers by assessing their driving patterns. Insurer carriers are implementing this in two different ways: Pay-as-you-drive (PAYD) and Pay-how-you-drive (PHYD). In PAYD insurance, the method of fixing insurance premium is based on the number of miles a vehicle has covered whereas in PHYD the insurance premium by assessing drivers’ driving style. Customers using UBI are the happiest lot as it gives them a lot of benefits.

Trend 3: Adoption of Big Data technology and customer centricity:

Insurers are implementing big data analytics solutions and turning them into actionable analytics. Using statistical modeling tools and methodologies, insurers firms are transforming unstructured and semi-structured data to gain meaningful customer insight. Gathering insights especially through social channels and acquiring right data from various sources in various formats help insurers to process customer claims faster and eliminate fraud issues. Claims processing wherein assessing the loss, calculating premiums, and complexity of claims were generally challenging processes for insurers as they were dealing with huge amount of data. Now, Big Data analytics helps insurance firms to efficiently execute the claims settlement and subrogation process with a problem. idenity and report events faster

Trend 4: Gamification processes, the power of gaming psychology:

Gamification is the concept of using game mechanics such as points, challenges, leader boards, and incentives, to motivate customers, create healthy competition among teams, generate buzz. This helps in encouraging customer loyalty, among other benefits. Insurers are tapping into the benefits of gamification so that their workforce is sufficiently motivated, energized and engaged in a competitive and goal-orientated environment. Gamification is becoming an integral part of improving customer engagement and loyalty.

Trend 5: Adoption of mobility solutions:

Mobile applications will hit a new high. Increased adoption of mobile apps on smartphones and tablets will be on the rise. Mobile apps are mainly developed for Apple, Android and Blackberry operating systems. Ease of use, accessibility, and convenience are the major factors behind the adoption of mobility solutions. For example, mobile apps can help customers/patients to follow their medication and treatment through regular reminders, counselling sessions and even through education. Mobility solutions will be a great value to Insurers.

For insurance companies, these new technology trends that include use of Internet of Things (IoT), usage-based insurance, mobile-friendly sites, not to forget mentioning Big Data and preference for mobility solutions are going to be the determining factors that can transform how they interface with their target audience in the insurance value chain. In a rapidly changing industry, insurance companies that ignore these trends risk being left behind.