By: Luke Jones, Published on July 29, 2017 05:40 PM, Last Update on July 29, 2017 02:42 PM
Technology is both a threat and boost for the insurance industry. Embracing innovative technology can help insurance companies expand and reach more customers. However, some technology could also make the industry as we know it obsolete.
So-called Insurtech development such as artificial intelligence, insurance on-demand, will soon transform the industry beyond recognition according to Nick Spooner, PwC digital experience centre lead partner.
“For hundreds of years, the insurance industry has been inert,” Spooner said, writing in a blog reported on by the Financial Standard. “Its processes and products worked; it simply didn’t need to change. Insurtech is changing that. As fintech is doing to banking, insurtech, the digitisation of insurance, is transforming the insurance industry.”
Spooner says these changes will not be limited to insurance operations, but will also include the possibility of customers not needing insurance at all. He points to the Internet of Things (IoT) and a movement towards connected devices that can all speak to each other. Spooner says these devices could make our lives so safe that we don’t need insurance.
“Connected smart devices will lead to less risk and smaller losses,” he said. “For example, smart water heaters and pipes will alert manufacturers to a potential rupture before becoming critical. Result? Fixed pipes, hot water, dry carpets and no need to claim.”
“With less risk, the nature of insurance will need to change as traditional risk models cease to apply,” he explained.