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The Next Big Things in Insurance Innovation: Telematics, Drones, and Wearable's

By Patrick Kolencherry, Co-Founder and VP Strategy of Pristine

Patrick Kolencherry, Co-Founder and VP Strategy of Pristine

Thanks to the “always-on” Smartphone, policyholders’ purchasing behaviors have evolved. They now expect to receive products, services, and information when and where they are.

In response, P&C insurance carriers have deployed mobile apps, created social media presence, and developed easier methods for customers to ask questions, receive answers, and pay bills. Carriers understand today is the era of the policyholder. To stay profitable and retain policyholders, carriers have to be where their customers are, when they are. It is the only way to stay alive in an increasingly competitive marketplace.

"The next big things in insurance innovation are not outside the organization​"

However, some insurance carriers like AIG and Allstate are doing more than transform their public-facing operations. They are also evolving internal processes through technologies like telematics, drones, and wearables. They are integrating technologies and data into every business function, allowing them to claim and keep more market-share.

Such changes belong to everyone in the industry, from the smallest to largest of carriers. Read on to learn how drones, telematics, and wearables can produce stronger investment portfolios through more accurate risk assessments, lower-risk policyholders, and on-the-job training.

Telematics

Telematics, in many ways, is a new expression of an old idea; insurance companies have long used basic mileage data to inform risk assessments and policies. What telematics changes is the amount and type of data now available through “always-on” telematics via “smart” OBD devices connected to Smartphone apps. Insurance carriers can now know not only how many miles potential policyholders drive but also how, when, and where those miles are driven. Such data creates a more detailed policyholder profile, allowing carriers to craft perfectly personalized portfolios that accurately reflect risk and personal driving behavior.

Drones

Drones have captured the spotlight with investments from Google, Facebook, and Amazon, but the devices show promise in a number of verticals, P&C insurance among them. Carriers can use the technology to act as a sort of “first responder” in complex cases resulting from natural disasters or to more accurately underwrite farmers’ crops. In addition, drones can help meet the demands of increased regulation through automatic uploads and attachments of data and rich imagery to client files.

Wearables

Several insurance carriers, including United Health, Humana Group, and Aetna, have adopted wearables as a component of health insurance. The devices allow policyholders to drive down premiums while meeting established health outcomes. Insurers, in return, are able to build a stronger, lower risk portfolio.

However, wearables have practical implications and applications in P&C insurance, too. Adjusters equipped with them are able to work hands-free, which is hugely beneficial when navigating their way through debris, rubble, or flood zone. They can capture photos and automatically upload them-as well as location data and other information-to the clients’ policies, creating a richer profile that can be used for not only assessing a claim but also underwriting future policies.

The other benefit has to do with the retiring workforce. It is no secret that senior employees are preparing to retire, but the vexing question is what to do in preparation for it. Forward-thinking carriers are outfitting their younger agents with a wearable, such as smart glasses, and pairing them with a senior expert. As junior agents work in the field either underwriting policies or assessing claims, they can ask questions and gain insights and expertise from their seniors, thereby perpetuating the insurance carrier’s institutional knowledge.

The next big things in insurance innovation are not outside the organization. They are inside it. P&C insurance carriers, who partner with technology vendors in telematics, drones, and wearables will improve internal underwriting and claims processes, create value-added services that delight customers, and grow their portfolios.

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