Insurance companies are fighting their reputation as technology laggards with early adoption of wearable technologies, according to Accenture's 2015 Insurance Technology Vision report.
The survey of 200 insurance executives found that 31% of companies are already using wearable technologies for customer engagement, and 63% of respondents expect widespread adoption of the technology in the industry within two years.
Other technologies that are expected to have imminent impact on insurance include smart devices (cited by 67% of respondents) and driverless cars (60%)
“While insurers have traditionally based their underwriting and pricing processes on a limited view of certain customer variables, emerging technologies such as wearables and other connected devices can help insurers break from their traditional business models and provide outcome-based services for their customers,” said John Cusano, senior managing director of Accenture’s global Insurance practice. “For instance, one leading insurer recently announced that it will provide new policyholders with a free fitness band to track their health progress and then reward their healthy living with a reduction in life insurance premiums.”
But with big technology investments comes big data, and data management is a key challenge for insurers. Forty-four percent said the amount of data under management in their organization has grown by more than half in the past five years, and 56 percent said that managing data is “extremely” or “very challenging” considering the changes in volume, variety and velocity.
Insurers are also increasingly taking part in open innovation initiatives, using application programing interfaces (APIs) to exchange data, and leveraging technology platforms to deliver better outcomes to partners and customers. Half of respondents (51 percent) said they plan to partner with major digital technology and cloud platform leaders, and 64 percent plan to engage with new digital partners within the insurance industry. Intriguingly, 45 percent aim to find technology partners outside the industry.
“Platform-based ecosystems are the new plane of competition emerging as part of the platform revolution’ that’s taking hold, and insurers that create meaningful ecosystems with the right partners will be best-placed to thrive in the future,” Cusano said. “Insurers will have to decide, in short order, whether to create their own platform ecosystem, partner to develop a new platform ecosystem, or join one or more established ecosystems.”
This article courtesy of Information Management's sister brand, Insurance Networking News.
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