1. Continued investment
CB Insights recorded over £1bn global insurance investment in the first nine months of 2016, and while we’ve already seen some impressive innovations and new brands coming through, InsurTech has only scratched the surface of what’s possible. With the breadth of technology now at our disposal and insurance customers still crying out for change, we’ll be seeing plenty more new players attracting big bucks in the next 12 months. Investment will come from both VCs and increasingly from established insurance players, as they bid to keep up with a rapidly evolving, tech-driven market.
2. Cyber insurance will be a must-have
Cyber-attacks have made the headlines with growing frequency in 2016, while CFC Underwriting handled more than 400 cyber claims this year alone, a 78% rise on 2015. Figures like this mean more and more businesses are waking up to the very real threat of a cyber-attack, no matter how big or small their operation. Many will also be motivated by the new data protection regulations coming into force in early 2018, which mean the potential impacts of a breach will become even greater, with fines set to increase to as much as €20m.
3. Connected insurance
The use of telematics is fairly advanced in motor insurance, enabling insurers to track how well their customers are driving and provide more personalised premiums. This level of connectivity and data analytics will start to purvey other areas of insurance in 2017, with insurers using connected devices to track your behaviour relating to a given risk. In cyber insurance for example, insurers will be looking to measure system vulnerability and reward businesses for proactively managing their exposure, while in health insurance, a wearable device could track your fitness and exercise levels. It’s a win-win, giving customers more suitable cover and personalised service, while enabling insurers to better understand their customers and encourage proactive risk management.
4. Artificial intelligence
AI is gradually working its way into our everyday lives, including how we buy, manage and claim on our insurance. In fact, according to Accenture, four in five insurers are planning to or have deployed some sort of artificial intelligence technology in their enterprises, and this is set to accelerate in 2017. AI and machine learning can be used in a variety of ways in insurance, from an online virtual assistant which walks you through the quote or claims process, to an algorithm that predicts what insurance you need, or that can identify fraudulent claims. It promises to both enhance the customer experience and greatly improve efficiency across the industry.
5. Even greater personalisation
One of the big complaints consumers often have about insurance is that policies don’t accurately match their needs, either excluding areas where they need cover, or providing cover for areas they don’t need. And while we’ve already seen moves towards insurance built for the customer, with more flexible subscription-based contracts and more specialist policies, this trend will develop further in 2017. For example, we’re set to see the rise of micro-policies, which allow customers to more easily insure individual items and turn their cover on and off when they need it. It will also become the norm to purchase insurance at the point of sale, for example when you buy a laptop, or when you purchasing a related product or service, e.g. anti-virus software.
It’s certainly set to be an exciting year and we can’t wait to see how it pans out, and indeed what surprises lie around the corner. But we can be sure of one thing – 2017 is going to keep us all on our toes!
Digital Risks is a specialist insurance provider that focuses 100% on the needs of digital businesses.