Managing risk is one of the most essential functions of insurance — and with new technologies and trends affecting how we live, the insurance industry must constantly evolve to address new types of risk.
People depend on insurance for a multitude of reasons, but it all boils down to one basic principle: minimizing personal risk on a day-to-day basis. Clients pay a fee, and in exchange, insurers promise to cover any costs associated with future calamities (which may or may not actually occur). Paying for peace of mind: it’s a relatively simple concept.
But today, determining what constitutes risk is anything but easy. As new technologies emerge and consumer trends and preferences change, pricing policies and marketing them effectively is an ongoing and constantly evolving challenge. Here, we guide you through seven developments that are disrupting the insurance industry as we speak.
Self-Driving Cars
The potential impact of the self-driving car is significant — and, at this point, it also appears to be an inevitable reality within the next few years. Most modern vehicles now come equipped with basic connected safety features, while fully automated navigational systems are being tested aggressively by Google and others.
These automated systems lessen personal risk and the frequency of accidents, but they also bring into question exactly what constitutes a driver and who truly operates these vehicles — an important consideration for insurers.
Ridesharing Policies
Similarly, Uber and other ridesharing services are changing the way that people commute, and blurring the line between personal and employer-provided auto coverage for drivers. While the industry has taken steps to address these changes, the rapidly evolving market will doubtlessly bring about new challenges going forward.
Climate Change
No matter where you stand on the subject, there’s no denying that the effects of climate change are a major risk on the horizon. Measures already being taken by world governments could have a significant impact on the industry, while homeowners might need to double downon coverage in a riskier environment.
Given the major changes already underway, insurers need to be ready to adjust in accordance with whatever Mother Nature throws at them.
Artificial Intelligence
While we may not be seeing fully realized androidsanytime soon, Artificial Intelligence in the form of high-level algorithms are already playing a major role in many industries — and while increased productivity and sales revenue thanks to the valuable data and insights these technologies provide is certainly on the table, finding the best ways to capitalize on this new breadth of information is still a challenge for many.
Cyber Insurance
As our we spend more and more of our time on the internet, risk is shifting accordingly. Personal internet security policies and enterprise-level cyber risk management are both major areas for potential growth.
Importantly, insurers also must focus their attention inwards and sure up their own cybersecurity — today, only about 33% of insurance holders are confident in their provider’s ability to withstand a major cyber attack. Going forward, the ability to protect client data will become a key selling point for insurers across every vertical.
ACA Issues
The Affordable Care Act (ACA) has been one of the most contentious pieces of legislature in recent memory — and it has had a significant impact the health insurance sector.
Adjusting to the new healthcare market is challenging enough, but with the additional challenges of litigation and some major carriers exiting state exchanges, agents need to keep a close eye trained on the ever-changing healthcare horizon as we move forward.
New Demographics
Within the past few years, we’ve witnessed the rise of the millennial generation as a major spending force within most insurance verticals — and soon, as they enter adulthood, they’ll officially stake their claim as the largest client demographic as well.
However, the needs and values of Gen Yers are quite different than those of other generations, and agents will need to adjust their strategies and offerings accordingly if they want to tap into this rapidly growing market.
Source: Precise Leads
Author: Precise Leads
