4 Ways technology is changing the life insurance game
It’s not a secret that the insurance landscape is in a state of rapid change. Technology is not just advancing faster than ever, but consumers are happily adopting new technologies at the rate they are produced, and demanding more of the features they expect.
Insurance professionals as a whole are definitely aware of the shift. 78% believe that insurance products need to be more dynamic, adapting to reflect the changing behaviour of the insured in real time. To maintain relevance, insurers must keep ahead of advancing technologies, and predict what their customers will be looking for, before they expect it.
Here’s a look at the technologies that will have the biggest influence on insurance in the years to come.
1. The Internet of Things
The Internet of Things is poised to be a huge driver of global change. A 2015 study by Gartner predicts 25 billion connected things will be in use by 2020. Referring to a web of interconnected devices, analytics tools and applications, the ‘IoT’ has big implications for the insurance market.
The possibilities for life insurance products alone are compelling. Wearable tech can provide a wealth of analytics never dreamed of. For example, smart watches. Health metrics recorded on your wrist could incentivise a healthy lifestyle by rewarding good behavior with lower premiums.
There are also obvious implications for property and commercial insurance. Real-time crash analytics from sensors in vehicles, and enhanced security with sophisticated alarm systems will become commonplace.
2. Realtime Insurance - from anywhere
In a world of instant gratification, customers value speed and ease of use above almost any other factor. They expect access to insurance at any time, in any location, via any device.
38% of consumers who bought life insurance in the UK in the last 12 months bought online, and for most modern consumers, mobile technology is seen as a right not a privilege. Lack of mobile capability is at best an annoyance, at worst a deal breaker.
Although this fast turnaround is a scary prospect for some, it’s also an opportunity for companies willing to move with the times. Life insurance sales with less customer interaction provides an highly scaleable model for those willing to use it.
3. Social Media
The insurance industry has been slow to adopt social media as a main function in their marketing strategy, lagging behind the other financial services such as banking and brokerage. Now, early hurdles like strict regulatory controls have been overcome in favour of appealing to younger demographics. Social campaigns for insurance products can be seen more and more with varying success. Life insurance, a product with strong ties to consumers personal lives, provides a wealth of topics and conversations for engaging with consumers in a meaningful way.
When this is done well, social media can drastically improve customers relationship with a brand. New York Life, one of America’s largest life insurance providers has an impressive social media presence. They put their success down to joining the conversation and providing valuable content, not just treating it as another advertising platform.
4. Cloud vs Legacy Systems
Cloud technology is fast, flexible and powerful. For insurance companies, it provides the opportunity to work with an efficiency, and agility never possible with legacy systems.
Initial concerns over security and safety of data still remain, but constitute less of a real threat and more of a fear of the unknown. The success of trusted cloud providers such as Amazon Web Services and Microsoft’s Azure prove the levels of security possible.
It seems one of the most intimidating barriers to entry is the migration process itself. Moving from clunky, complicated legacy systems can be costly and difficult, but it’s worth it. These dinosaurs of insurance systems do not allow for the speed required to keep up with the changing market.
Where does the opportunity lie?
To make the most of advances in technology, insurance providers must keep learning. Tried and tested methods are no longer enough. Those who can provide insurance, when, where and how consumers expect it, are the ones that will succeed in the years to come.