Emerging technology has shaped nine distinct 'Areas of Transformation' in the insurance sector, according to Transforma Insights
The insurance sector is undergoing a significant transformation, driven by advancements in technology and the integration of innovative solutions. This transformation, as detailed in the report 'Digital Transformation in the Insurance Sector', is enabled by key technology groups such as Artificial Intelligence (AI), Distributed Ledger, Internet of Things (IoT), and Robotic Process Automation (RPA).
One company leading the charge is Domestic & General (D&G), which uses DataRobot and Earnix software to provide product warranty plans based on customer attributes. This approach allows for a more personalised and efficient service, reflecting the industry's move towards increased accuracy and efficiency.
In the realm of AI, improved analysis techniques are being employed across the industry. This includes the use of image processing, natural language processing, and robotic process automation. For instance, Internet of Things (IoT) solutions are being utilised to gather better information, such as data on air quality, people or traffic movement, and personal health monitoring.
The insurance industry is also embracing blockchain technology. A.P. Moller-Maersk, an integrated container logistics company, uses the Insurwave blockchain platform for marine insurance to manage marine hull insurance for its fleet of 800 vessels. Rice Exchange, a blockchain-based rice trading platform, automates and simplifies the complexity of rice trading, and provides insurance for containers and condensation damage to rice.
Servitisation, a concept in IoT, is another area of focus. High-quality, comprehensive, and up-to-date information gained via an IoT connection can be used to transform the supply of assets into a supply of services. Vendors like Relayr offer propositions such as completion warranty, retrofit warranty, business outcomes warranty, and service level warranty.
Policies covering repairs for servitised assets, and insurance for consequential losses in case the servitised assets malfunction, present opportunities for insurance services in servitisation. Agria, a Swedish pet and farm insurance company, uses SAS software to help calculate pricing and risk factors for its insurance products and produce breed profile reports more efficiently.
Digital transformation is not limited to these examples. Several German insurers, including Allianz, AXA, Generali Deutschland AG, Signal Iduna, Nürnberger Versicherungen, and VHV Versicherungen, have undertaken digital transformations in automobile insurance. They have integrated AI for claims processing, improved customer journeys from first notification to claim closure, and optimised personal injury management, achieving enhanced operational efficiency and cost savings. The ADAC has also leveraged digital tools for traffic data analysis and real-time information services to support automotive mobility and insurance products.
In conclusion, the insurance industry is witnessing a wave of digital transformation, driven by technologies like AI, blockchain, IoT, and RPA. This transformation is bringing about significant changes, increasing efficiency, accuracy, and opening up new opportunities for insurance services. The next few years promise to be an exciting time as these changes continue to unfold.
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