Technology consultancy firm Capgemini claims the insurance industry is facing a “fundamental threat” in the form of the combined forces unleashed by robotics and the internet of things (IoT).
In a recent study – World Insurance Report 2016 – into the growing trend of using robotic process automation for office administration procedures, as well as such things as cars equipped with telemetry devices which record every driving action, Capgemini found that expectations are changing within customers it calls “Gen Y” – those aged between 15 and 34. One example of a new company which has combined IoT and telemetry in vehicles is Veniam.
John Mullen, corporate vice president and global insurance leader for Capgemini, says: “By not providing adequate engagement for digitally-advanced customers, carriers [companies] run the risk of pushing them toward a growing population of market entrants and non-traditional technology-driven competitors.
“Gen Y is clearly indicating that they do business differently and those insurers who respond to them on their terms will have a clear competitive advantage.”
Capgemini says it analysed data from 15,000 insurance customers around the world, as well as from 150 insurance company executives, in producing the World Insurance Report.
In comments entitled “IoT looms large”, Capgemini says it’s not just younger customers’ attitudes insurers need to worry about. “A more fundamental threat, or enabler, to the future of insurers is the coming wave of connected technologies, in the form of such innovations as smart home ecosystems, wearable devices and machine-enabled drones, robots, and cars.
“These IoT technologies are expected to transform traditional insurance business models, including everything from the way insurers connect with their customers to their fundamental assessment and management of risk.
“Yet despite this threat, insurers are significantly underestimating the degree to which connected technologies will be broadly adopted. Only 16 percent of insurers think customers will embrace driverless cars, for example, while 23 percent of customers express interest.”