The topic of digitalization financial services is perhaps the most popular now. We will talking about sales channels, and about new marketing, and about a new philosophy: in the “figure”, classic banking and insurance look very different.
Someone believes that this is the main driver of demand growth – finally, insurance will be convenient and understandable. Someone is afraid that monitoring the client, which allows developing individual proposals and minimizing fraud, will turn into a system of total control.
The growing transparency of our lives is an objective trend. Service providers, not only financial ones, receive so much information about us that remote monitoring by insurers will be almost invisible. According to research by the Bain consulting company, insurers (excluding life insurance) receive digitally more than 40% of customer information. Moreover, most customers are willing to provide them with personal information, provided that it will affect the tariff. For example, in Germany, the proportion of such clients aged 24-35 years exceeds 80%.
Digitalization has penetrated many spheres of human life, from shopping and travel to education and banking. However, insurance is one of the less “digitized” areas. Its technological lag is inherent not only in the east market. A 2016 KPMG global report by The Pulse of Fintech says the insurance industry has been using outdated IT technology for a long time and is only now ready for transformation. The drivers for the technologicalization of insurance will be “smart” medical technologies, telematics, new services for registration and payment of policies.
Consumer preferences are transforming, and insurers are looking for new growth points. According to the observations of Zetta Insurance, the demand for products with a discount option, in particular with a franchise, is growing in the motor hull; An example of a niche solution based on the Internet of things is telematics products. Telematics, or “smart” insurance, allows tidy motorists to save on insurance, and insurers can better manage risks.
Using special equipment, the insurer monitors the driver’s driving style, the actual mileage of the car and other points on the basis of which the cost of the policy is established. In Europe and the USA, this approach is called “usage-based insurance (UBI), and there it is actively developing. Telematics sales leaders are Italy and the USA. In Germany, the proportion of such products is still small.
Meanwhile, telematics in motor insurance can be used not only as a means to manage the risks of the insurer and reduce the cost of the policy for the driver, but also as a tool to improve the convenience of interaction in general.
For example, when buying a policy, you do not need a physical examination: in the US and the UK, insurers check the car online, get information from the databases and find out the presence of insurance cases, data on technical inspections. In your personal account, the settlement of the insured event occurs and the payment is also transferred there.
And this is only the initial stage of the use of telematics in motor insurance. So, with the development of autonomous cars in which the largest Internet giants Google, Apple, as well as car manufacturers, telematics and smart insurance based on it, will be a universal solution for a car owner. It is expected that by 2020 self-driving cars will be produced by almost all of the largest automakers – Daimler, Nissan, Volkswagen, Tesla, Ford, Toyota, etc.
At the same time, a significant decrease in the cost of insurance for such cars is predicted, and, according to Warren Buffett, this is one of the significant challenges for insurers in the next decade. With the development of active control systems, not the length of service and age of the driver will be of increasing importance, but the equipment of the car.
“Smart” technologies are applicable not only in motor insurance, but also in real estate insurance (“smart” home), personal insurance (“smart” VHI, the use of gadgets for remote health assessment). Thus, the company Discovery with the help of a range of services and a loyalty program has literally integrated itself into the life of its customers. People who are actively involved in sports do not smoke or drink alcohol, eat well, and receive lower health insurance costs.
The latest trend is the development of integrated personal risk management systems. They allow you to enable or disable insurance upon request or specified conditions. Say, traveling to the mountains, the client activates the policy through a mobile application, and the action of the motor hull and VHI for this period is frozen.
Digitized insurance means low costs (which means the possibility of reducing the cost of the policy), individualization, convenient online management of options and a set of products. As for total control, it already exists without insurers: search engines, telecom operators, even banks already know a lot about us.
The opinions of experts of banks, financial and investment companies presented in this section may not coincide with the opinion of the editorial office and are not an offer or recommendation for the purchase or sale of any assets.