Property and casualty insurers are undergoing a period of rapid change as they adjust to technology advances, according to the speakers on a panel of industry experts titled “A View from the Outside Looking In,” held as part of the 20th annual Property/Casualty (P/C) Insurance Joint Industry Forum in New York earlier this month.
Listed below are some the key insurance industry technology trends driving change, as mentioned by several of the panelists.
Home Insurance. A residential technology push is emerging with the introduction of “smart home” applications based on wireless devices that may monitor and control kitchen appliances, home temperatures, security systems, lighting, and more in the home of the future. Implications for homeowners and renters insurance will be carefully studied within the insurance industry. For example, one panelist questioned a situation where an error in setting a thermostat remotely might cause a home in a cold climate to suffer from broken pipes.
Auto Insurance. On the road, auto insurers are closely watching several technology trends. Automotive collision avoidance systems featured in many new cars can include autonomous braking, reverse backup sensors, rearview cameras, lane departure warnings, enhanced infrared night vision, and adaptive headlights. A 2015 report from The Insurance Institute indicates that automatic braking can reduce insurance claims by up to 35%, as reported by The Wall Street Journal.
Mobility itself is changing, beyond the technology within personal autos. Insurers are making changes to adapt to the rapid growth of rideshare companies like Uber and Lyft. According to event panel members, insurers have taken steps to create modified insurance coverage that applies to private vehicles used for both personal and commercial purposes.
Cyber Insurance. As the number and severity of commercial data breaches increase, changes are taking place across both insurance companies and regulators. The National Association of Insurance Commissioners (NAIC), for example, is working on new reporting requirements intended to increase the disclosures that insurance carriers must file in regard to cyber liability policies.
Insurance Sales. Google Compare, an online comparison tool that presents insurance rates pooled from a number of leading insurance carriers, is a leading example of how the role of the insurance agent and sales producer may be changing in the future. Increasing trends toward digitization and the use of advanced analytics among U.S. auto and home insurers will change how insurance sales jobs are configured in the future, according to a speaker from McKinsey & Company.
“Insurers need to think differently about exposures and how to craft products for a changing world,” according to one industry expert from a risk management company.
Click on the link for more information on insurance industry technology trends covered by the panel “A View from the Outside Looking In.”
About The Author
Bill Hager is an insurance and reinsurance expert and arbitrator. He is President of Insurance Metrics Corp. and also an elected member of the Florida House of Representatives, where he serves on the Insurance and other committees.
Mr. Hager is a former Insurance Commissioner for the State of Iowa, and former President of NCCI, Inc., the nation’s largest workers’ compensation rate corporation.
As a regulator for eight years in five positions ((i) Assistant Attorney General assigned to the Department of Insurance, (ii) First Deputy Commissioner of Insurance, (iii) Iowa Commissioner of Insurance, (iv) Administrative Law Judge, and (v) Executive and Member of the National Association of Insurance Commissioners), Mr. Hager, along with his staff, approved (or disapproved) of the language of most all insurance policies used by each of the 1,500 insurance companies doing business in the state.
This regulatory action also included the approval of policy application forms.
In all of the general statements here, see the state law of the controlling jurisdiction. Every case is different and circumstances vary widely depending on the governing state law, policy provisions, and related considerations.
This blog is provided for educational purposes only. It is not intended to provide legal advice or an opinion in regard to any topic discussed. The blog should not be used as a substitute for legal advice from a licensed attorney in your state.