All sorts of forecasts about our lives in the future was made by the Jetsons, including automatic razors, jet packs and traffic congestion on the skyways. But the 1960s and 1980s Hanna-Barbera animation, avoided the entire idea of insurance coverage and what the future had to hold for it.
To be fair, it is barely unexpected. Risk management is hardly ever a popular subject in sci-fi. And in any case, the insurance coverage market has not always been as fast as marketing when detecting the latest innovation. “The whole market is concentrated on how life was lived 5 or 10 years back,” states Andrew Brem, primary digital officer at Aviva. He’s not the only one who feels that way. 74 percent of participants felt the market had not revealed an increase in digital development, as claimed by broker Willis Towers Watson’s study of insurance companies.
However change is coming as the market awakens to the concept that the cover we may purchase 20 years from now will look very different from the cover we need today. Insurers and companies are putting millions into R&D. A “digital garage” was created by Mr. Brem as part of his business in Hoxton Square in east London with a sole purpose of coming up with new innovative ideas. Axa is putting more than EUR3bn into IT and digital advancements. And others, from Munich Re and Allianz in Europe to XL Catlin in Bermuda and Manulife in Canada, are investing immensely.
On the other hand, billions more are entering into so-called “insurtech” start-ups which are intending to challenge the huge players of the insurance market. For example, Brolly, So-sure, Guevara, Friendsurance, Lemonade and a host of other start-ups are intending to disrupt insurance coverage companies the same way that Uber, Airbnb, Netflix and Spotify have completed flipped markets on its side. CB Insights state that $1.7 bn was invested on 173 insurance coverage start-ups in 2015. “Risk management and dealing with insurance coverage will warp into a new dimension in the future,” states Scott Walchek who runsthe insurtech start-up Trov. “We’re actually starting to research and develop industries that are much slower in the digital age, an industry of builders indemnity and business insurance brokers.”
How we purchase
The first thing that might alter over the next 20 years is the way we purchase insurance coverage. Even with the development of websites and mobile apps in a heavily digital age, many people still find the process very time consuming, complicated and frustrating. “Purchasing insurance coverage is extremely ‘old-school’, with stressful and unlimited questions all leading to a quote that no consumer wants to spend days looking up themselves,” Mr Brem states. “We’ll be relocating to a world where those concerns are essentially answered immediately. With big data, we are finding fascinating and precise predictors of risk that do not increase individuals’ concerns.”
One example is the way Aviva rates its vehicle insurance coverage. Usually this would include a great deal of questions about the kind of vehicle, the location and the drivers’ history. But the business has discovered an analytical link between the purchase of personal indemnity insurance policies and safe driving. So life insurance policyholders will be able to see quotes that have reduced whilst becoming inspirational, thought leaders and leadership speakers of their industry. This concept is most likely to grow over the next few years. “Not far into the future, the power of information and big data will show insurance companies that individuals who look the same really might not be,” states Mr Brem.