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What Will Insurance Look Like in 10 Years?

By September 1, 2022March 25th, 2024No Comments

The future of insurance contains many possibilities. Increased data collection and breakthroughs in artificial intelligence have opened doors for insurers of all sizes to think outside the box.

WaterStreet Company has developed cloud-based P&C Policy Administration Software with an advanced API capable of connecting insurers to any number of third-party vendors to help bring insurers into a digital future.

Future of Insurance

Tales of the future of insurance are brimming with science fiction, but the technology to back up these fictions in fact exist. Over the next 10 years, insurers are destined to test and apply a plethora of solutions to act faster, better and smarter, developing a whole new outlook on what insurance can do for policyholders.

It’s hard to imagine a dispatch of mobile drones sweeping into a car accident for repairs, or a dashboard within a car notifying the driver of an automatic claims submission. McKinsey’s collaborative story, Insurance 2030 – The Impact of AI on the Future of Insurance, paints a very cyber and automated future, and the most idealistic forms of artificial intelligence.

For insurers to enter a new wave of AI-powered insurance, the stepping stones are clearer than you might expect.

1. Business Intelligence

Business Intelligence software allows insurers to better manage their data. Between structured and unstructured data, an enormous amount of man hours are required to review and understand insurance analytics. The value of this data and intersections of the data calls for elite data warehousing and discovery techniques. Imagine better connections between all departments, from claims data and customer behavior to geolocation and actuarial data. Many advances in risk segmentation and formation of new policies are possible with not just better analytics, but better data management leading into the insurer’s analytics.

With BI, insurers are able to implement dashboards and reporting to derive value from their data so that not just the company’s data scientists can make sense of these connections. With both a historical database and predictive analytics, insurers can advance their modeling and forecasting to make decisions that were never before possible. The results of BI are far reaching and bring insurers into a strong foothold in the industry.

2. Telematics & Internet of Things

Data collection is at the heart of the future of the insurance industry. Methods for data collection have transitioned from manual input and verbal phone services to real-time data feeds, giving insurers a direct view into the source of customer data.

Telematics is the general field of collecting telecommunications data related to travel. Insurers have the ability to easily gain telematics data through smart phone applications today, allowing immediate implementation of app-driven telematics. Drivers and policyholders have become less weary when it comes to data collection and behaviorally accept data collection when it comes to benefiting from it. Many cars designed today have these connections built-in for transmitting data back to manufacturers. Insurers have the opportunity to forge long-term connections with manufacturers, particularly when it comes to self-driving cars. A very interesting relationship is forming between manufacturers of self-driving cars and insurers, giving insurers the challenge of diving into the technology, risks and future of insuring automated vehicles.

The Internet of Things (IoT) has accelerated over a short period of time. Consumers are now familiar with smart devices, from smart home hubs to smart refrigerators. IoT devices allow the automatic transmission of real-time data, benefiting the consumer with faster, more intelligent service, and benefiting the manufacturer with data to enhance product development. Smart homes are due to rise in popularity thanks to many IoT use cases, including security systems, flood prevention, fire detection, and more. Much of this data is due to become critical for risk segmentation, giving policyholders the benefit of reduced rates thanks to their prevention of risk, and giving insurers comparative data to more accurately estimate risk across smart homes.

3. Core Systems & Partner Ecosystems

The best method to centralize an insurer’s data is with a Core Policy Administration System, built with native cloud architecture. When the insurer has a centralized hub for storing and connecting data, this allows for not only greater efficiencies and high-level reporting, but also creative development. Cloud insurance software allows for drastic cost savings for insurers currently hosting their own data, and allows the company’s Core PAS to update over time. Insurers are freed to focus on the future of product development with the tools necessary to deploy never before seen offerings.

The greatest differentiator for Core PAS solutions today is their ability to connect in partner ecosystems. With all the data collected by the insurer, much of this data is unactionable without additional information to contextualize the data. Third-party connections are essential to bringing out the best in the insurer’s data. Application Programming Interfaces (APIs) make these connections possible, allowing integrations and partnerships between the insurer’s PAS and supplemental data services. The top third-party integrations today include payment processing, risk assessment, claims management and document management. As insurers seek new partnerships to enhance data ecosystems, expect wild and new third-party services to cater to what insurers need to lead their products into a science fiction future.

About WaterStreet Company

WaterStreet Company offers the advantage of being a one-stop shop for nearly endless capabilities. Not only are we capable of connecting to any number of third-party vendors, we offer an all-inclusive Policy Administration suite with claims management, billing, document management, reporting and more built in.

We are here for the future of insurance and look forward to the fantastic advancements due to follow for our industry.

Ready to Take Action?

Reach out to WaterStreet Company today to request a consultation and demo of our solutions.

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