Insurance industry due for big changes in near future

Insurance industry due for big changes in near future

The insurance industry is being reshaped, and not just by political forces in Washington, D.C. New technologies, improved methodologies and increased demands are having a dramatic effect on how claims are filed and processed. In an article for PropertyCasualty360.com, Nicole Michaels outlines some of the trends that will change insurance claims in the near future:

New tools and technology: New technology will assume many of the duties currently performed by loss adjusters. Proactive loss prevention, especially in the areas of fraud, data breaches and cybersecurity, will become a top priority as technology advances. Remote working and new sourcing arrangements will reduce real estate costs, and retail and personal insurers may reduce their employee bases by as much as 50 percent.

Decreasing claims volumes: Claims frequency is falling in many lines of business. Improved safety features, including driver assistance measures and restraint systems/airbags, have greatly reduced the likelihood of serious injuries in automobile accidents. On the property front, sensors and monitoring systems for homes and businesses are having a similar effect in reducing loss and damage.

Digital disruption: Companies that rely on internet technology, such as Amazon and Uber, are changing the concept of customer expectations as far as service interactions, personalized products and efficiency go. The bar has been raised in all industries, including insurance. In the field of claims, that translates as better self-service tools offering timely and transparent information about claims status that will be shared proactively to customers and made available through online channels.

Improved enterprise risk management: In recent years, large firms have greatly improved their risk management capabilities, thanks to the wider scope and more stringent health and safety regulations, as well as a greater focus on the return from capital. More accurate date regarding claims incidents and improved insight into the costs of risks are likely to decrease overall claims volumes from large policyholders.

Severe weather: The increased frequency of weather-related events indicate that significant flooding is likely to continue in the years to come and to be a major issue for insurance companies. Claims operations will need new technology to warn in advance of these events, and businesses will need to be more flexibility to scale up quickly to handle sudden demand spikes. Management of such weather-related issues will soon become business-as-usual for many companies.

The insurance industry is set to experience seismic changes in the coming years. For those companies willing to invest in the technology and consider automating and outsourcing some of their processes, those changes need not spell financial troubles. In fact, with the right preparation and attitude, those changes could offer an opportunity for growth and success.

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