Insurance: what changes to get ready for in 2020

BY ANDREW STEWART

It’s quite amazing that we are about to enter a new decade. If you were to close your eyes as a kid and imagine what the world would be like in 2020. I would bet $1,000,000 that none of you cared about how the insurance industry would change and evolve. We probably envisioned and cared more about if there would be flying cars, robots waiting on our every instruction or some idealist version of the Jetsons cartoon.

The insurance industry has always had a love/hate relationship with Canadians. The image of an insurance agent having to hard-sell people on life, health and car insurance has been ingrained in our pop culture. We Canadians have always needed a strong nudge to start thinking about life insurance. Auto and home insurance is pretty much mandatory so it’s viewed as more of a necessary evil.

I believe a lot is going to change in the coming years, not only for the industry but for consumers. The biggest changes will be in digital transformation such as Big Data, AI and how consumers will find and purchase what coverage they need. For example being able to get a quick and instant quote and purchase a policy online has already been in the auto insurance industry for some time and now it’s starting to change the life insurance industry in the same manner.

Will auto and home insurance rates increase in 2020?
The advent of new technologies like AI will affect the auto industry for the major role it plays in autonomous/self-driving vehicles. Auto insurance policies that address the issues related to operating semi-autonomous and fully autonomous vehicles are already needed. I believe in the near term, auto insurance rates will likely increase, since insurers will be uncertain how to price the uncharted territory of self-driving vehicles. You can already see how the recent rise in ride-sharing and house-sharing for home insurance has added additional risk mitigation. This is a time when major changes will need to be made to many policies.

Customer education by advisors will become even more important
It’s always been the job of insurance professionals to help the public contemplate “what if” scenarios, then help think through solutions when they select coverages and purchase policies. With the coming of new risks and insurance products, this part of the insurance industry and professional’s responsibility to consumers becomes especially important. Society and big companies have always done things backwards where they market new products first to increase the bottom line and then try and educate people when we aren’t used to thinking beyond the common perils insurance policies historically protect us against.

Streamlined processes to improve customer experience
User experience will become even more important. We are conditioned to think and have everything we want by clicking a button on our computer or smartphone. Providing customers with instant more accurate quotes with underlying underwriting algorithms built in so we can purchase online will be a must. Prospective buyers and current customers will demand 24/7 instant access to support from professionals. The experience of how claims will be processed so it’s fair, consistent and faster for policyholders. As an example, consider the use of smartphone cameras. They make it incredibly easy to document belongings and damages people have. They can be used to submit claims, the images are objective and documented, and they can be uploaded to a company’s system almost instantly. The instantaneousness and simplicity will likely be what’s most important to people.

We can never know exactly what the future will bring, but more and more it is being designed by human creation and use of technology. The decade of 2020 will go by faster than the previous, our insatiable appetite for speed and instant gratification. So buckle up and put on your 3D glasses its going to be an exciting show.