By Tony Tarquini, Industry Principal, Insurance at Pegasystems,
Looks into his crystal ball and explores how the next generation of insurance customers think technology will affect them in the coming decade
It’s strange to think, but ten years ago there was no such thing as a smartphone or a tablet device, wearable technology was a feat that could only be made possible by taping your mobile phone to your wrist, and superfast broadband was nothing more than a glint in a service provider’s eye.
Fast forward to the present day, and we live in a world dominated by relentless technological evolution. Today we think nothing of the fact that each of us carries around what is, effectively, a streamlined supercomputer in our pockets, or the extent to which the data these devices - and others like them - produce can play a significant role in how we live our lives. The impact this data has had on the insurance industry in particular is well documented, and it’s clear that it’s already helping insurers to tailor premiums and products in direct relation to customer behaviour and preferences. But what will the next ten years hold, as the technological revolution continues to gather speed? Moreover, what could it mean for insurance companies and the customers of tomorrow?
A recent study1. by Capgemini and Pegasystems has been designed, in part, to speak to this next generation of customers and ask them what they think will be the most important technological breakthroughs during the next ten years, and how it will affect them in terms of their insurance premiums. ‘Millennials’ (UK residents aged between 18 and 34) are today’s heaviest technology users and adopters of new tools and ideas, which makes them ideally placed to give a perspective on how they see this evolution taking place, and what it will mean for them.
Perhaps one of the most revealing things to emerge from these conversations was the detail around the extent to which many see technology as a direct enabler for them when it comes to them and their relationship with insurers. A good example of this is the fact that almost half of those surveyed (46 per cent) believed that by 2025, their passports will contain detailed digital information that not only records what countries we go to, but also specific places within these countries. Imagine the possibilities that this could have for the insurance industry; insurers could offer premiums on travel insurance that rely on up-to-the minute information on a specific region’s crime rate, weather patterns or even the number of claims that have been made at any given time.
Dynamically adjusting premiums and danger alerts could both be a realistic possibility within the next few years.
It’s clear that the next generation of insurance customers see technological evolution not only as a natural process, but also as something that will play a critical role in their lives as they grow older. A great illustration of this is that almost a quarter (21 per cent) of younger Millennials between the ages of 18 and 24 said that they felt that drones should be used by insurance companies to process claims in the next ten years – a thought that would have been unthinkable as recently as a couple of years ago.
One thing is clear; technological change will continue to alter the way consumers operate over the next ten years. Whether this means gathering data directly from customers to prepare tailored premiums, or evaluating their use of technology to conduct a risk assessment, it’s clear that it will be imperative for insurers to get on board the technological bandwagon and adapt to these changes as they occur. It can present them with an opportunity to better understand their customers, anticipate their problems and engage with them in ways that offer them real value. Moreover, if insurers do not recognise the value of technological, and the way it can help them, they run the risk of being left far behind not only their competitors, but also the expectations and demands of their customers.
Of course, time flies when you’re having fun, and before we know it, 2025 will roll around - no doubt when it does, we’ll all be travelling around using jet-packs, flying cars and hoverboards, while robot servants do our bidding. It will nonetheless be extremely interesting to see whether insurers will find by then that by embracing technology, and by using it to understand and engage with their customers and their behaviour, they could end up saving significant amount of money for themselves - all while making a healthy profit to boot!
1. Research was conducted by Millennial generation researchers Decode, in association with Pegasystems and Capgemini. The study was also advised by one of the UK’s top generational sociologists, Dr Paul Redmond, and surveyed 1,000 UK residents between the ages of 18 and 34 on their attitudes to insurance.
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