PROPERTYCASUALTY360.COM NATIONAL UNDERWRITER | JULY 2018 | 35
Insurance customers benefit from risk prevention and more
personalized, cost-saving offerings. Insurers benefit from
enhanced risk profiling and improved customer satisfaction.
Many of today’s
insurers are passionate about digital transformation
and what it can do
for business and
the industry is
steady shift from
that has the potential to dramatically improve lives
for financial loss,
have done remarkably well, the
industry is getting
geared up to help
loss, lead healthier
lives, live longer
and drive safer.
In short, digital
in the insurance
business will potentially do more
than any other
industry to further
society’s long-term well-being.
Now, the Internet of Things (Io T) enables
insurers to reference data and evaluate risk,
reward good driving behavior and determine
appropriate insurance premiums or discounts.
What’s more, usage-based insurance (UBI)
monitors drivers’ behaviors in real-time. Auto
insurers such as Progressive, Discovery, Allstate
and State Farm are leveraging IoT to monitor
driver habits and reward good driving. Insurance
customers benefit from risk prevention and more
personalized, cost-saving offerings. Insurers
benefit from enhanced risk profiling and
improved customer satisfaction.
KEEPING UP WITH DISRUPTION
Nearly 80% of insurance company chief
information officers expect technology to significantly change or transform both the industry
and their organization in less than five years,
according to Ovum. More than a third of
insurance companies are already using or
developing Io T projects; another 25% are
actively evaluating Io T projects.
These new technologies increase the risk to
some incumbent carriers that new entrants will
cause business disruption. Startups may lack the
deep actuarial and underwriting experience and
capabilities of established carriers, but they have
access to customers, Io T infrastructure or the
ability to process data in real-time.
Consider Lemonade, which was created
thanks to artificial intelligence (AI). Lemonade is
disrupting traditional insurers in an industry that
typically takes weeks, or even months, to settle
most property & casualty insurance claims.
Using AI and machine learning, Lemonade
manages policies and claims to make underwriting and claims processing easier. In December
2016, Lemonade set the world record for settling
a claim in just three seconds by using its claims
bot running 18 fraud algorithms. Insurance
carriers will need to develop and rollout innovative technologies faster if they hope to compete
with emerging industry disruptors.
As the volume of data grows, insurance companies must use solutions like AI and machine
learning to process large amounts of data. The
ability for insurers to adopt these types of platforms now can lead to better product and service
agility. By using technology like AI and machine
learning, insurers can deliver new products
and services to customers while more effectively managing their existing portfolio. With a
strong digital core, insurers can bundle products
and services to deliver personalized offerings
to specific customer segments and distribu-tion channels.
Meteo Protect has an innovative product that
provides customized index-based weather insurance to farmers. The French startup developed
an app called Vivaldi that allows customers to
select policy specifications. The app aggregates
weather-related data from multiple sources,
analyzes risk and presents price quotes — all
in real-time. This has resulted in 8-times-faster
scenario pricing. This new type of insurance
helps farmers better protect against and navigate issues that arise due to climate change and
adverse weather conditions.
THE CHANGE AFOOT
The digital economy is still evolving. By aligning
transformative actions across these three priority areas, businesses can more easily manage
the transition in stages, creating a digital core
and then extending digital functions across the
enterprise. The reduced reliance on traditional
risk-assessment and data-processing methods
will provide insurance customers with a much
more personalized experience via a multichannel environment. These steps will reduce
the possibility of business disruption and propel
insurers to fresh success.
Robert Cummings ( email@example.com) is vice
president and global head of IBU Insurance at SAP.