McKinsey has published a series of articles with regards to the transformation of the insurance industry through technology.
In McKinsey’s Insurance 2030 report, they imagined a customer in that not-too-distant year whose drive to a meeting across town starts with a digital personal assistant mapping a potential route and sharing it with his mobility insurer. The insurer comes back with another route that has a much lower likelihood of accidents, along with a calculated adjustment to his monthly premium. This digital assistant also alerts him to changes to his life insurance policy, which is now priced on a “pay as you live” basis.
Such integrated user stories may sound far-fetched, but they will emerge across all lines of insurance with increasing frequency over the next decade. In fact, all the technologies required already exist, and many are available to consumers. In this evolution, insurance will shift from its current state of “detect and repair” to “predict and prevent,” transforming every aspect of the industry in the process. The pace of change will accelerate as brokers, consumers, financial intermediaries, insurers, and suppliers become more adept at using advanced technologies to enhance decision making and productivity, lower costs, and optimize the customer experience.
AI will reshape claims, distribution, underwriting and pricing. With this understanding, we need to start building the skills that can embrace emerging technologies and create the culture necessary to be successful players in the insurance industry of the future.