Jacob’s doorbell rang, and a self-driving car that his personal AI assistant ordered was standing in front. Upon hopping into the car, he decides to drive today and move the car into the “active” mode. Jacob’s assistant maps the best route and also gives him suggestions for upcoming congestion and a low likelihood of accidents.
Jacob’s assistant notifies him that his mobility insurance premium will double on the route he selects and signifies the distribution of other cars on the road. It alerts him that his life insurance policy will now be priced on a “pay-as-you-live” basis. It also informs him about the additional value he may get this quarter. The additional amount will be deducted from his particular bank account on the 30th of next month.
When Jacob pulls into the parking lot of his hotel, his car bumps into the signboard. As soon as the car stops moving, its internal diagnosis system determines the extent of damage. It even indicates and captures the part that got damaged. As soon as he reaches the driver’s seat, the screen on the dash informs him about the damage. It also confirms the approval of the claim. It also reports that the mobile response drone is already on its way for inspection.
If the vehicle is in running condition, then it will be directed to the nearest repair station, or a replacement vehicle will be sent once the guarantee card is scanned.
It seems as if we have time-traveled to 2030. Techniques such as convolutional neural networks AI are capable of mimicking the perception, reasoning, learning, and problem-solving of the brain.
With this evolution, insurance will shift from “detect and repair” to “predict and prevent.” This will accelerate as brokers, consumers, financial intermediaries, insurers, and suppliers become adaptive to technologies.
As technologies get integrated into the industry, carriers need to position themselves to respond to the evolving landscape.
Insurance executives need to understand the factors contributing to how technology will reshape claims, distribution underwriting, and pricing. With this understanding, they can develop skills and talent to embrace technologies. Also, they can create that culture along with a vision needed to be successful players in the industry.
Let’s understand the major tech trends reshaping the insurance industry in 2024 –
Increased adoption of machine learning
This year, AI and machine learning will be rapidly becoming the cornerstones in the commercial insurance industry. Insurers are already leveraging AI for algorithmic underwriting, risk assessment, claims processing, and customer service. These advancements are going to make processes efficient, provide valuable insights, and ultimately lower the costs for both insurers and policyholders.
More Informed Decisions
The integration of advanced data analytics into commercial insurance will expand significantly in 2024. Through real-time data analysis, insurers will precisely evaluate risks and personalize policies, therefore optimizing pricing strategies and improving customer experiences. Insurers are gathering and analyzing more extensive sets of complex data, including weather patterns, social demographics, and behavioral data from sensor-based devices and applications. This information helps build a multidimensional approach to assess risks and policy pricing.
Insurers are looking forward to expanding and structuring their data for better decision-making and believe this trend is going to continue in 2024.
ESG is becoming more regulated
In 2023, ESG became a mandatory step in any insurer’s due diligence. As environmental concerns continue to gain prominence, insurers are likely to incorporate sustainability factors into their risk assessments in 2024.
The insurance insider report says that Lloyd’s has begun to develop a solution that will quantify greenhouse gas (GHG) emissions across managing agents’ underwriting and investment portfolios.
Looking at the details of these new regulations, London Market insurers are taking proactive steps towards sustainability.
Tech solutions for Brokers
A pivotal trend in 2024 is advancements in broker technology. Technological solutions such as digitized onboarding processes, real-time insurance quotes and digitally available information on insurance policies, collaboration tools, online quote comparison tools, automated claims management, claims processing, etc., will help brokers take a significant step towards greater operational efficiency and interoperability within the commercial insurance market.
What’s next?
Looking ahead to 2024, the insurance industry stands at the threshold of innovation. The adoption of AI for algorithmic underwriting, data-driven risk assessment, and personalized policies signifies a significant leap. Moreover, the integration of ESG considerations into risk assessments, as seen with Lloyd’s initiative to quantify greenhouse gas emissions, highlights the industry’s proactive steps toward sustainability.
Additionally, the burgeoning technological solutions for brokers herald a pivotal trend, enabling greater operational efficiency and enhanced collaboration within the commercial insurance market.
As insurers strive to adapt and harness these technological advancements, the key lies in understanding, embracing, and evolving with the transformative tech trends shaping the insurance industry landscape. With this forward-thinking approach, insurance executives can pave the way for a resilient, tech-savvy industry that caters to evolving consumer needs while ensuring sustainable, data-driven practices.
