The insurance industry has evolved from what it used to be some years ago with the changes in consumer behavior and the advent of new technologies. As an insurance agent, we have had to modify what we offer to address consumers’ specific needs. As more technological, social, and economic trends arise, more changes will be witnessed across the industry. Below are some of the current disruptive changes that have affected the insurance industry in recent years.
Increase In The Use of Autonomous Vehicles
There is a current surge in the rate of adoption of autonomous vehicles across the world. With this increase comes the need for insurance companies to adjust accordingly, especially as the automobile insurance shifts. By 2045, it is expected that manually controlled vehicles will shift down to about 15 percent, which also opens up the idea of autonomous vehicles being used for commercial transportation. The insurance industry will need to shift its focus to accommodate these new changes.
Shifted Liability
The adoption of automated processes cum the rapid growth in technology makes it necessary for insurance companies to start thinking of new liability equations. With autonomous vehicles and new technologies, insurance companies now have to answer who is responsible for accidents.
Big Data
Insurance companies spend an estimated 45 to 50 percent of their time interested in sourcing data to formulate new insurance products for the masses. However, with technological advancement and Big Data from third-party data sources, it becomes a lot easier for insurance companies to access the data set needed to make the decisions they need to make.
Climate Change
Climate change has been reported to have caused a spike in worldwide losses over the past couple of years. With climate change being responsible for as much as three times the rate of losses in the past years, insurance companies can now make relevant decisions based on the available policies to cater to customers’ needs.
Social Inflation
The changes in legal theories and juries’ views on social issues are fast affecting outcomes of insurance claims. These changes can play a role in increasing the amount of compensation paid out to victims, even in cases with limited liability.
Sharing Economy
There is a current decline in sharing and on-demand economy services. This means that these services are no longer readily acceptable in insurance. The sharing sector is estimated to hit $335 billion in revenue by the year 2025. In response to this, insurance companies need to take steps that proactively allow them to protect themselves and the interest of their customers.
Seniors And Connected Devices
The increase in the use of smart devices has helped to save many seniors from life-threatening health attacks. All of these technologies, from flood sensors to wearables, have played a part in emergency response services, significantly reducing the chances of accidents and deaths among the senior population. With this, more consumers are making different decisions and choices than they would have made in the previous years, which has affected the insurance industry.
The insurance industry will witness a lot more changes and disruptions in years to come. To stay updated with the latest news, visit https://www.millerhanover.com
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