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The Future of the Insurance Industry and Risk Management, Business and Industry Trends Analysis

While insurance may seem to some people like a staid and traditional industry of long-standing, it is in fact extremely subject to digital disruption, competition from startups and the evolution of existing practices, just like virtually all other industries.  The largest factors that will drive change in the insurance field include:
Online technologies, including the growing convenience and preference by consumers to compare policies and prices online, and then buy directly from the firm with the best offering.
The Internet of Things (IoT), GPS, wireless communications and artificial intelligence, enabling insurance companies to use advanced technologies to track the behavior, health and locations of insureds, including such activities as driving of cars and trucks (auto insurance) and physical exercise (health insurance).  This practice is in its infancy but is already making it possible for insurance firms to offer variable car insurance rates that are influenced by drivers’ behavior, including mileage driven and speed driven relative to local speed limits.  Advanced algorithms with limited amounts of artificial intelligence are already making it possible for underwriters to make competitive price offers for life and home insurance based on such factors as credit scores, geography and health records.
In fact, artificial intelligence (AI) is already having very broad implications for insurance firms, making everything from underwriting to policy pricing to claims processing faster and more efficient.  AI will be very widely used to determine the desirability and risk associated with individual consumers who apply for everything from auto insurance to life and health, as well as businesses applying for commercial insurance of many types.
The need for all types of specialty insurance policies will also accelerate.  New technologies and new types of business, industrial and consumer activities are creating demand for unique insurance, such as policies designed especially for Uber drivers or Airbnb rental homeowners, as well as makers of self-driving cars and related technologies.  Elsewhere computer and online activities are driving the need for cyber activity, hacking and identity theft insurance.  New fields of business likewise create lucrative opportunities for specialty insurance underwriters, and this trend will continue to grow.
Many other types of technological advancements will quickly create changes in the insurance field.  For example, in safety inspections and loss inspections, drones are rapidly being put to use.
In automobile damage claims processing, many leading insurers now enable policy holders to use smartphone-based, automated systems instead of in-person visits.  The auto owner takes a photo of the damage, submits the photo and information about the accident via smartphone, and AI (sometimes aided by a human agent) remotely assesses the loss.  Practices like this will accelerate, enabling consumers to get faster results while insurance underwriters reduce overhead.
Of course, businesses and industries worldwide have learned the hard way that online systems offer an ever-evolving way for fraudsters to steal money.  Insurance companies will be utilizing ever-more-sophisticated digital identity, safe customer login and antifraud technologies.
The fastest rates of growth in insurance sales are, and will continue to be, in emerging and rapidly developing nations such as India and Indonesia.  This is where much of the future of insurance lies, in finding better ways to package, price and advertise insurance to business and personal lines customers in markets that enjoy rapid rates of growth in the middle class, in the ownership and value of homes and cars, and in the need for retirement and life insurance, as many families, for the first time, find that they have significant levels of assets and income to protect.


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