This is not a usual time – and, as Robert Frost said, “the best way out is always throughâ. Even now, insurers are following the path of technological advancement, trying to keep up with the market. Many actions have already been taken, new trends are being implemented by the industry, so will 2021 bring about substantial changes? Or can we consider 2020 the year when we have gained momentum and now we just need to move forward steadily? Which trends should we follow and consider investing in? Certainly the following.
Big data analytics – data, data and data once more
The use of big data analytics is nothing new for the insurance industry, but what is absolutely new is the scope of data that can be obtained, and the way it can be used. Purchasing habits and credit reports are the examples of data sets that can be used by insurers when carrying out suitable procedures. And with the right data sets, the insurers can offer personalised products and increasingly improved protection with minimal claim ratios. Skillful use of data is, and will be, the major challenge for insurance companies in 2021 and beyond. And one of the key drivers of the data explosion is the increasingly widespread availability of IoT technology.
Internet of Things (IoT) – even more data
IoT systems collect enormous amounts of dispersed data. According to IDC report “Data Age 2025: The Digitisation of the World, From Edge to Core”, IoT devices will generate as much as 175 zetabytes or trillion gigabytes of data in 2025. For reference, in 2018 the number was 33 ZB. By 2025, the connected, smart devices will expanse to 50 billion units. IoT is a technology that insurers already use in property insurance. In the next steps, the industry should maximize the potential of IoT in health and life insurance. This technology will support the process of claims adjustment, loss mitigation andfraud detection. It can also be used to build hybrid models of so-called smart insurance.
Smart insurance – personalisation and automation
Tracking the behavior of the insured does not seem so awful when it starts to work to their benefit. Mass data collection allows insurers to create insurance perfectly suited to our lifestyle and requirements. What every prosperous business needs is profit – and offer personalisation is financially beneficial for both insurers and consumers. This is where technologies like AI analytical models or process automation and robotisation come in handy. Another trial for the industry is to improve cost and loss ratios. In this respect, the said technologies can be developed on a large scale in the range of underwriting.