Insurance has always been a constant need over time, and has been regarded as being a stable industry that will avoid disruption. Because of this, it has been historically slow to change. Advances in technology have brought about new challenging players in the industry, bringing instability to traditional players, and presenting a unique opportunity for insurers to innovate. With this shift toward digital in the industry, traditional insurers must embrace technology to remain relevant.

Embracing New-age Technology
Technology can be a blessing in disguise. Traditionally, insurance has been an industry with relatively low customer engagement, with less customer interaction than nearly any other industry. Traditional insurers blame the intermediary nature of the business, however, technology-savvy new entrants are changing the age-old model and using technology to enhance the traditional model and more directly work with the customer. Although new technologies may be intimidating, it provides countless opportunities and frequent touch points with the customer at large, gleaning more insight into customer needs and desires and being able to adjust this accordingly for the best offerings. Moreover, the reach and popularity of hand-held devices and new software development tools have fast-tracked the advent of technology into the insurance sector.

The Insurance industry too has embraced the On-demand Usage-based Platforms due to the increasing demand for personalized insurance solutions. Traditional insurance products are not ideal in the new landscape as assets are increasingly shared. The current model of insuring individuals as owners of assets over long periods is outdated; instead a shift toward insuring individuals as users of assets over short periods is becoming increasingly common. The On-demand Platform is the expectation of Gen Now. From purchasing and policies to pricing and claims, it’s all digital now thus enabling people to protect the things they want, when they want, for whatever duration, with a single swipe. Technology is bringing together service providers and customers to more closely align offerings and needs, and appeal to a new class of consumers as millennials come of age. It is not just the customers that will benefit, but the benefits are mutual. In this technological revolution of sorts, those who choose not to embrace it are at risk of being left behind.

The ongoing technology shift is gradually transforming the insurance landscape as it

enables new ways to measure, control,and price risk, engage with customers, reduce cost, improve efficiency, and expand insurability. This has also led the new age insurers to modernize, create new insurance products and services, and shake up their business models.

Technology is bringing together service providers and customers to more closely align offerings and needs, and appeal to a new class of consumers as millennials come of age

The Road Ahead
Creation of offerings that the customers don’t just expect, but desire, customer ownership and direct access to end-customers is the need of the hour and that is realized through personalized offerings by extracting customer needs based on product usage instead of generic criteria such as age, zip code, historical records etc. The usage of new-age technology enables institutions to monetize customer data. With tremendous amounts of additional data on top of already existing customer and claims data, insurers can continuously collect this data, analyze it and develop new propositions around smart usage insights. The data can also be used for internal purposes such as risk management, price optimization and fraud analytics to boost data-driven decision-making.

This has helped in bringing about a major shift in client demographics, behaviors and expectations and that can lead to a drastic change for the better in the consumer pattern in general. Most of the digital solutions are designed keeping the millennials and the digital natives in mind. Millennials, who have been exposed to digital technology and innovative platforms from an early age, are beginning to move into their peak earning and spending years and have become an influential segment of the population. Their high expectations for technology-based services, convenience, transparency, speed, regular engagement, and a personalized experience that reflects their needs are defining how products and services are delivered.

Their preferences and expectations though are a particular challenge for the insurance industry and this is where emerging and existing cutting-edge techniques including Blockchain, Cognitive Machine Learning, Robotic Process Automation, Mobile technology,Customer Experience Design and the Internet of Things (IoT) can make a huge difference.

Insurers leveraging these techniques can now track accurate, real-time and authoritative data sources, minimize fraud and increase transparency, understand and classify data automatically, thus paving the way to a mobile-first and digital-first approach. According to Strategy Meets Action, “There is a widespread understanding that the evolving connected world has very significant implications for insurers.” At the same time data and analytics-related projects consistently makes on the list of insurers top strategic priorities. The IoT for insurance is all about data, and this data becomes even more powerful when combined with emerging technologies like Blockchain to assist with challenges like asset provenance or Artificial Intelligence (AI) techniques as a data source.

Conclusion
For enterprises in the Insurance domain that are yet to embrace the digital avatar, this is the time to innovate and migrate to superior digital experiences that will help fuel further innovation and transformation within the industry. At the same time, addressing issues surrounding comprehensive data regulation will grow in importance, and insurance regulators and data privacy rules will play a significant role in determining how insurers will be able to use data and also influence the level of product customization available to customers.