Other parts of this series:
- Insurers must define their social contract…or have it defined for them
- “Raising” AI to be explainable, responsible and collaborative
- Insurers rely on data, but how much do they trust their data?
- Insurers need scale, and these technologies can help them achieve it
- Five technology trends that can reshape insurers’ business
Virtual and augmented reality. Microservices and blockchain. “Edge” computing. To drive long-term growth, insurers need scale—and these technologies can provide it.
Each year, Accenture identifies the technology trends poised to change the insurance landscape. I’ve already talked about two: citizen AI, or the need to “raise” AI to be transparent, responsible and collaborative; and data veracity, or the obligation to ensure that data used for decisions is accurate and trusted.
In this post, I’ll briefly highlight the remaining three trends.
Extended reality: The end of distance
Farmers Insurance used to send household insurance claims adjusters to a two-story home in Los Angeles to learn how to assess damage caused by catastrophes. But with virtual reality (VR), employees can now train with six different floor plans and 500 different damage scenarios.
VR and augmented reality (AR) both promise to help insurers address the challenges posed by physical distance. As in the Farmers example, training is an ideal way to apply this technology. It can provide valuable experience to prepare for potentially dangerous situations. More to the point, VR and AR can equip insurers with scalable, flexible training that supports personalization and caters for each individual’s skills and aptitude. As I discussed in a previous blog series, this capability is crucial for preparing the workforce to collaborate with AI.
Frictionless business: Built to partner at scale
Insurers’ ability to bring innovations to market largely depends on building technology-based partnerships at scale. Unfortunately, many insurers are hampered by legacy systems that were never designed to work with outside partners. In addition to digital decoupling—using data lakes, robotic process automation and machine learning to enable innovation despite legacy systems—insurers can benefit from technologies like microservices and blockchain.
By breaking down applications into their simplest component functions, microservices can enable an insurer to share specific parts of its architecture with partners. APIs are an example of a microservice. MetLife, the multiline, multinational insurer, has used microservices to improve its agility—even with its 30 years of legacy infrastructure. If microservices enable sharing at scale, then blockchain holds partners accountable by delegating trust to the distributed ledger. Many reinsurers are experimenting with blockchain and smart contracts to facilitate reinsurance transactions.
Internet of Thinking: Creating intelligent distributed systems
In addition to overcoming legacy systems to forge digital partnerships at scale, insurers must extend their infrastructure to connect with other environments. Much has been made of the promise of the Internet of Things and how it can provide real-time, personalized information to help insurers better price risks and help customers prevent losses. But as the amount of data generated by IoT sensors increases, generating instant insights and actions via the cloud won’t be practical.
Insurers must not just connect their systems to others’, but also shift analysis and decision processing closer to where the data is generated. This so-called “edge” computing has many applications, such as autonomous vehicles that need to obey traffic laws even without a wifi signal, or industrial equipment on oil rigs. For insurers that have adopted a cloud-first mentality, this may require a shift to reincorporate hardware-focused skills into their workforce or forge alliances with hardware companies.
Insurers’ ability to bring innovations to market largely depends on building technology-based partnerships at scale.
I began this blog series by looking at the social contract between insurance, its consumers and the broader community. Next week, I’ll return to this idea, and comment on where insurers can focus their actions to capture the opportunities these technology trends can present. Learn more about the five trends in [marketo-rtp-id id=”rtp-form-id” image=”” description=”” title=”Accenture Technology Vision for Insurance 2018,” registration_page_link=”https://financialservices.accenture.com/ins-technology-vision-2018-rp.html”] and get in touch to discuss how Accenture can help you harness the promise of emerging technology.