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How is technology changing the world of insurance?

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Insurtech is rapidly becoming the next big thing in the world of General Insurance.

Since the turn of the last century, technology has revolutionised the way in which we live. With an ever more sophisticated range of smartphones and computers linking us to the expanding Internet of Things, the world is becoming interconnected and businesses are having to adapt the way in which they work. In the world of insurance, this same technology is disrupting the traditional market: last year investments in Insurtech surpassed $1.7 billion, with an increase predicted for this year. From the creation of new jobs to the way in which claims are calculated, InsurTech, and the myriad opportunities it presents, is paving the way for a revolution in insurance

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New developments in technology are already influencing the insurance market. As AI systems become more intelligent, products like the self-driving car get closer to becoming a reality. Their ability to drive without human interference promises to shake up both the motor and the insurance sectors by massively decreasing the risk of a crash, and by removing the potential for human error at all: indeed, Google’s autonomous car had its first accident after travelling 1.45 million miles, which is a far cry from the UK, where road fatalities increased by 2% last year. Similarly, the increasing amount of ‘smart’ sensors and robots in factories that can tell whether an accident is imminent, or which are able to prevent accidents entirely, heralds an era where fewer insurance claims will be made. 

This is already happening today. The digital footprint we leave behind on our phones, when we drive smart cars, or when we make insurance claims create a wealth of analytical information for insurance companies to use. The data that insurance companies receive when a claim is made is often discarded once that claim has gone through, however more of these companies are realising how useful this data can be when it comes to make informed decisions when writing tailored insurance claims for their clients. When young drivers buy insurance for their car, add-ons like black boxes can be installed in their vehicles, which can track the driver’s movements and as a result massively decrease their insurance premiums. 

With technology capable of risk management and prevention making their way onto the market, the way of calculating insurance claims will change to focus more on preventing risks rather than reimbursing clients after a claim. More insurance companies are starting to partner up with tech corporations in a bid to reduce their premiums, by offering technology that will decrease the chance of an incident by 20%, they can charge 20% less than their competitors, giving them a distinct advantage and creating a much more competitive market. 

Naturally, these developments herald a change in how the market is structured and which jobs are in demand; people responsible for auditing insurance risks for technology, and Loss Assessors, whose job is to assess a building before an event history, rather than afterwards, will become more common as the market shifts to focus on prevention rather than reimbursement. The rise of cyber-crime has created a new sector of the insurance market, aimed at covering those whose businesses are at risk of online attack, which requires people skilled at using and implementing computer hardware. As AI becomes smarter, robo-advisors will start to replace comparison sites, or serve as the go-between for insurance companies and their clients. 

The growth of technology within the insurance sector has been rapid, and the changes instantaneous. Our increased dependence upon technology has generated huge amounts of data that Underwriters are using to deliver ever more personalised insurance quotes, and a new shift in focus onto preventing rather than dealing with the aftermath of events, InsurTech has caused waves in a market that has, until now, been largely traditional. With the advent of smart cars and the growth of insurance and technological company partnerships, expect to see a change in the variety of jobs on offer, and IDEX to be right there with it.

If you’d like to find out more about roles in InsurTech, contact us here.