How Commercial Insurance Will Be Changed By Technology |
Posted: July 25, 2017 |
There are a lot of different types of commercial insurance policies that are out on the market. Because of this, it is not always possible to uniformly show that all insurance plans will actively be affected similarly by technology. Nonetheless, when it comes to trends, there are commonalities that impact the commercial insurance industry at the macro level. Here are some ways that commercial insurance will be changed by technology over the coming decade: Predictive analytics A few years ago, people started noticing that artificial intelligence had turned a corner in some industries, bringing new opportunity to those who could figure out how to leverage it to their advantage. Jaguar is a good example. The car manufacturer included a feature that uses a camera, data, and a neural sensor to find out if the driver is inattentive. If the car decides that you are out of it, it will then try and wake you up by using haptic response so that you avoid an accident. Another feature that is offered is to use a camera and past data to see what the driver is looking at on the console. Instead of needing to find the right option and select it, you can just look at what you want to do and the car will predict what you were interested in and select it for you. When it comes to commercial insurance, predictive analysis continues to be more and more sophisticated because there is a lot more data flowing into the models that are used to determine the future. As much of the data comes from the IOT, or internet of things, it can normally be relied upon to increase the probability that an insurance company's prediction will come true, making it more likely that you insurance costs will come down. Automated underwriting Another goal of commercial real estate that will be looked upon as a grail-like achievement when it is accomplished is the automation of the underwriting department. Underwriting is the process of figuring out how much the company should charge for a client or a group of clients. Today, that process is manual in many companies. Humans use formulas and run analyses from statistics the company provides them with. In the future, there will be more data coming in from outside sources that is up-to-date and complete. It should create a situation where the necessary data is there and so it is possible for a computer program to actually underwrite an insurance contract completely without human intervention. Once this occurs, commercial insurance may drop in price a little bit. Security sensors One battleground area in business insurance is in the area of security sensors. In cars, customers are complaining that some car models pass radar through their car on the highway in order to see ahead. In businesses, some customers are complaining that merchants are using cameras with 3d-sonic response to control people's experience as they walk by a shopping center. In both cases, the problem is liability versus a greater sense of security. Wherever a greater sense of security wins, the commercial insurance industry will also benefit because they will have another security deterrent and they will have more data that helps them determine just how safe an environment actually is. Given the fact that the current implementation of security sensors has been accomplished without checking the local law or building code in most parts of the US, there may be even more backlash over the course of the next few years as consumers discover that they have been spied upon and ask for their privacy rights back. Long-term, however, the commercial insurance industry will probably have access to a lot more sensor data than they do currently. The future is bright for many commercial insurance companies. The addition of new technology in predictive analytics and security means that the accuracy of forecasting loss should be better while the overall costs for the firm go down.
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