Policyholders faced innumerable challenges within the past two years, resulting in unprecedented changes to their consumer behavior. Personal lines insurers responded swiftly to meet insureds’ new and evolving needs. They went all-in on digital self-servicing capabilities for customers, agents and employees, but recent market activity suggests that insurers’ top technology priorities of the past year may be different in 2022.
New research from SMA shows that the plans and progress of some transformational technologies are accelerating as others have hit the brakes. The “Transformational Technologies in P&C Personal Lines: Insurer Progress, Plans and Predictions for 2022 and Beyond” report offers a glimpse into which technologies have the most activity in the industry, where insurers are investing and what insurance executives think about the potential of the technology to transform their businesses.
Of the 13 technologies deemed transformational in the report, including AI-related innovations and others that fall outside of the AI family, six are seen as having a short-term impact on personal lines, yielding significant changes to business operations and the customer experience. The report also examines technologies in the mid-term horizon that are expected to become more mainstream in the industry in the next two to three years and long-term horizon technologies.
Personal lines insurers are currently reprioritizing their plans with a blend of investment activity and maturity levels. Research shows insurers currently favor digital capabilities that replace face-to-face interactions – continuing a trend that emerged early in the pandemic. One example of a technology under rapid development is virtual payments. Nearly seven in 10 personal lines insurers report investing in digital payment technologies during the pandemic, including mainstream services like Venmo and Zelle and insurance-specific vendors. While the initial focus has been on inbound payment solutions, SMA observes that piloting and implementation of outbound claims payment solutions are already beginning to expand.
When looking at long-term transformational technologies, 5G/edge computing shows increased promise in personal lines, with more insurers reporting interest in the technology now than in previous studies. Many of the possibilities related to the Internet of Things, autonomous vehicles and new user interaction technologies, and others will depend highly on the widespread availability and adoption of 5G. As the technology becomes more widely adopted, it is likely to move to the mid-term horizon before becoming a short-term technology.
As the pandemic continues to play out and a post-COVID era emerges, personal lines insurers will continually need to review and revise their technology strategies and plans. The move toward broad-based digital capabilities will require insurers to understand how specific technologies contribute to digital transformation and how priorities and road maps are changing in the current environment.
Article By: Heather Turner
Source: Insurance Thought