As one decade ends and another one begins, it’s the perfect time to look back over the last ten years and make a few predictions for the next ten years.
In 2010 the industry was facing a great deal of uncertainty. The economy was still recovering from the 2008 financial crisis and European insurers were preparing for Solvency II. From a technology perspective, the hot issues were multi-year core initiatives like legacy solution replacement; web services including API for insurance agencies and service-oriented architecture (SOA). The term “InsurTech” hadn’t even been invented
As the decade progressed, some of the hottest technology trends set to revolutionize the industry were Big Data, Hadoop, Cloud Computing, Internet of Things (IoT) and eventually InsurTech. Of course, there were a few misses along the way! Remember when Google Glass was going to transform claims adjusting? But, if I had to summarize the 2010’s, I would call it the “Decade of Data”.
Now, as we begin the new decade, I believe that we are entering the “Decade of Intelligence.” The last ten years saw an exponential growth in the data generated, both by insurance carriers and by connected IoT devices. Until now, however, mature technology did not exist to analyze this data effectively at scale to unlock its business value.
Today, with Quantum Computing, advanced Graphics Processing Units (GPUs), Artificial Intelligence (AI), and Machine Learning, insurers can generate deep, actionable insights very quickly from the vast amount of data available to them. The opportunities are endless and extend throughout the policy lifecycle. For example, life insurers are using AI and facial analysis to instantly calculate a risk score based on a selfie on the insured. Auto insurers can verify damage and assess repair costs based on a smartphone photo. And property insurers can easily verify pre-existing vs. new damage through satellite image analyses.
Predicting the future is impossible, but in insurance—an industry built on mitigating uncertainty—the outlook could be considered somewhat predictable. I am betting that in 10 years, insurance executives will still be concerned about premium revenue, loss ratios, customer retention and increasing regulations. However, I am reminded of my favorite Bill Gates quote: “Most people overestimate what they can do in one year and underestimate what they can do in ten years.”
Personally, I cannot wait to see how the insurance industry changes over the next decade and at Shift we have already considered how AI is the key to transforming the insurance industry.