The Impact of Technology on the Insurance Industry

Is your agency prepared for the impact of technology on the insurance industry?

Technological advancements have changed the way we work and play, especially for those working in the insurance sector. Consumers are using their mobile devices and GPS functionality to customize online searches and personalize shopping experiences. And with the increase in social media engagement, using the latest tools has never been of greater importance. This isn’t surprising though, given how commonly businesses analyze customer data to add brand value that keeps their customers happy. Is your business prepared for the impact of technology on the insurance industry?

What’s behind the changes?

Over the last few years, many insurance firms have expanded and enhanced the way their customers are buying insurance. People are demanding a change from the more traditional way of purchasing coverage to a method that is faster and more convenient for them. Big data and advanced user experience analysis have revolutionized the way people buying. More customer data allows insurance companies to now turn policy due dates and coverage terms into actionable sales follow-up tasks. Valuable customer insights also provide the potential for insurance agents to substantially increase their cross-selling and upselling sales opportunities. Keeping up with the impact of technology on the insurance industry is necessary as new cutting-edge technologies emerge each year.

How has technology impacted auto insurance?

Several years ago, ride-sharing companies such as Uber and Lyft did not exist. However, as the use of these apps has grown among consumers, so have the number of people enjoying the benefits of making a living or earning some extra money has a driver for one of these companies. This has created a shift in automobile insurance needs and the potential for policy changes for those covering these ride-share drivers. For example, a driver for Lyft will likely have different insurance needs than someone who uses their vehicle for strictly personal purposes. But that isn’t the only way auto technology has impacted insurance. As NPR pointed out after an accident last year in Arizona, self-driving cars have raised a question about liability. Typically, in a car accident, the insurance company of the individual found to be at fault is usually the one who pays after a car accident. But when there is no driver, this complicates how victims are compensated or who can be deemed at fault. Those impact questions will likely continue to impact the insurance world for several years into the future.

Tech has also given rise to more computerized devices, which have made our vehicles smarter. Cars, trucks, and SUVs are packed with an array of blind-spot detectors, touchscreens, built-in sensors, and backup cameras. These high-tech devices strive to make drivers safer and reduce accidents; however, this also raises the question if they increase the potential for distracted driving. The National Highway Traffic Safety Administration reports that in 2016, 3,450 people were killed due to distracted driving and 391,000 were injured in 2015 alone. While this is a sobering reminder of the impact of technology, it reminds us that insurance companies should try to use technology in a positive way, to better engage and add brand value for their customers. For example, Progressive’s Snapshot program uses mobile app or plug-in device to monitor the customer’s driving. And when the drivers remain accident-free, they can earn discounts. Talk about a win-win! This is just one of the ways that companies are using customer data and is likely to evolve as technology becomes smarter and more refined.

How has technology affected the way agencies operate?

While the impact of technology on the insurance industry has been substantial for personal automobile policies, it has also extensively changed what kind of insurance jobs are available and the software used to handle general operations. Technology has influenced not just customer communications and marketing, but also the areas of underwriting and claims adjusting. According to Insurance Risk Services, some insurance agencies are now using drones to explore areas that have been hit by natural disasters like hurricanes and floods. This visibility provides a way to analyze damage and process claims for large buildings and properties safely and more efficiently than ever before. Technology now allows insurance agencies to track not just policy dates but also demographical and psychographic information about their customers to uncover potential areas at risk. But in order to interpret the data, companies must have an analytics team or individual who can help determine where those opportunities exist and why. Data analysis is growing in importance for many insurance agencies as they review how tech has impacted their staffing needs.

What do you feel has been the impact of technology on the insurance industry? How is your insurance agency leveraging mobile applications, CRM systems like Blitz, and data to engage your customers? We would love to hear from all of you working in the insurance industry. Please share your thoughts and post your questions by commenting below.

What do you feel has been the impact of technology on the insurance industry?  How is your insurance agency leveraging mobile applications, CRM systems like Blitz, and data to engage your customers?  We would love to hear from all of you working in the insurance industry. Please share your thoughts and post your questions by commenting below.