How Might Disruptive Technology Change Insurance?

Are insurers watching disruptive technologies closely enough?


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What should be on an insurer's “To Do” list?

Figuratively speaking, an insurers “Done” list covers a lot of the legacy-level work. Our homes, cars, commercial enterprises, health, and life tend to be insured. 

The “Doing” list will cover much of the newer tech that comes by way of insurtech, creating neo insurers, like Lemonade, and we’re seeing incumbent insurers collaborating to bring nuanced solutions to the market. Technological disruptions like AI, Machine Learning, and IoT, among others, are reshaping the way insurance is written and carried out.

What remains? The “To do”. By no way is this an exhaustive, definitive list; however the SPEEDA Edge platform tracks how disruptive technology sculpts industries, and while seeing changes in how insurers are going about business, we’re also seeing changes in the way the insured is being built or created.

What if?

What happens if homes are no longer built as they were for centuries because of innovations in prefabricated tech or adapting smart technology?

What happens if a gasoline-driven vehicle is possibly replaced by an electric one, and perhaps even becomes driverless?

What happens if a commercial enterprise automates previously human-labor intensive functions, like using a robot in the kitchen?

It’s possible that factors influencing the insurance methods, considerations, and risk factors, too, will fluctuate. Should insurers, then, also watch disruptive technologies, understand how they grow and challenge traditional spaces— be ready to adapt if and when needed?

Let’s take a quick look at the disruptions that might impact the way we see a home, a car, or an injury-prone task. We note that these examples are handpicked because they illustrate a hypothesis and need wider-scale research to understand directional patterns or probable impact, to test the predictions (for a comprehensive understanding of each disruptive technology like electric and/or self-driving vehicles as well as automation, talk to our team to get a preview of the platform).

Smart homes

Cities of the future are likely to get smarter, and technology is already at play. When a smart home leverages smart building technology, the risk factors of a smart home may change from traditional modes. For instance, areas such as building access, fire and life safety, and structural integrity can be monitored in real-time, potentially reducing threat response time. Smart building technology promises higher efficiency and better safety. TechTarget outlined the opportunity in pairing smart home and homeowners insurance back in 2018, and spells out the implications of connected devices mitigating risk factors, which insurers need to be savvy with.

Electric and self-driving cars

With the pedal-to-the-metal on reducing gasoline-driven vehicles to combat carbon emissions, we may see Electric Vehicles (EVs) on the road sooner than later. We recently explored Tesla’s movement in auto insurance, an area it entered initially via partnerships but seems to be getting into its own underwriting functions and expanding their insured vehicles to more states. Insurers should be on alert, watching for the oncoming wave of technology that’s re-imaging how we drive— if we’re driving at all. 

Driverless truck tech is not fully commercialized yet, but we’re seeing our Truck Technology Industry map the developments. For instance, Einride, a Swedish tech developer for autonomous and electric trucks, has plans to bring its autonomous Class 8 trucks dubbed “Pods” to deliver goods in Dallas-Fort Worth, Texas. The company expects to make the deliveries fully autonomously (i.e., without a safety driver). Likewise, there are many implications to insurance if the vehicle is tech-driven, and or the automobile companies start providing insurance themselves. Staying up-to-date with the tech and industry movements, therefore, bodes well for insurers.

Injury-risk tasks (robot-tech)

If we take the hospitality industry, for example, a high-pressure kitchen environment can be accident-prone. CEO of Miso Robotics, Mike Bell, in his interview with Sacra, (see the full interview on our platform), addressed the common issue of labor shortage in repetitious, high-risk tasks that are likely to be taken over by a robot; like that of a frying station. 

Reinsurer SwissRe caught onto the speedy developments in robotic technology entering various industries and begs the question, “are we paying enough attention to  disruptive technologies?”

What does it mean if a machine does a job previously done by a human, and how well should insurers understand the technology involved to be able to customize insurance?

To explore…

Many other areas where insurance has traditionally high penetration, such as travel and health have not been explored, but we’re happy to give you a tour of our platform if you’re keen to know more. You can email us here!

Janine Manishka Gunasekara
Content Marketing Lead, SPEEDA Edge

Janine is a Content Marketing Lead for SPEEDA Edge, an emerging industry intelligence platform.