From prediction to prevention: the next 10 years of insuretech

Open up any financial services-focused newsletter and you’re bound to read an article about AI and data analytics technologies transforming the insurance industry. While newer market entrants, such as Lemonade, are using bot technology to change the traditional insurance model, others are piloting blockchain-enabled platforms. From underwriting to customer service to claims processing – every aspect of the insurance value chain is part of the digital transformation conversation.

For PR and marketing professionals, this is both an opportunity and a challenge. While there’s plenty to say about how technology is leading to a fundamental shift in the insurance industry, breaking through the digital transformation noise requires more than “AI is here to stay” messaging. The question becomes: how to communicate an insurtech narrative that looks beyond adoption to application, especially as many insurance companies are still dealing with old-school legacy systems?

Beyond the Digitalization Conversation

There’s no question that insurance executives understand the potential value of these technologies. Numerous surveys show that the majority of the insurance industry has plans to deploy some form of AI technology in the next few years. Execution of these plans, however, can be a different story. According to a recent Accenture survey, 70% of respondents believe AI is advancing at a pace faster than their organizations can implement it. And just 31% say they have processes in place to use data and analytics to drive new insights.

This means that for every bot-driven start-up out there, there’s probably dozens of traditional insurance companies still trying to overcome the basic challenges of digitalization. Despite this transformation lag, insurtech conversations continue to move forward. The smart insurance communicators recognize that in 2020 and beyond they will need to elevate the digital transformation conversation in one of two ways:

  • Quantify the impact of digital technologies on the insurance value chain – time saved on claims cycles, workflow improvements, potential for profit growth, etc.
  • Focus on forward-looking practices for digital technologies – using AI to predict climate change disasters, using blockchain to prevent insurance fraud, creating CX bots that manage B2B insurance claims, etc.

The more that PR and marketing professionals can move from adoption to specific applications of insurtech, the more likely they are to break through and lead industry conversations. Even if your own organization is just starting its digital transformation journey, you can demonstrate insight into the future of insurance by developing POVs on the following.

The Boom of Cybersecurity Busts

Data breaches are getting bigger, happening more often and getting more expensive. As organizations collect greater amounts of sensitive personal data – such as Facebook’s recent push into medical information – this is only likely to increase.

With the average total cost of a data breach reaching $3.92 million in 2019, it’s in insurance companies’ best interest to help clients shore up cyber defenses and prevent future security lapses. And it’s just one of the many cybersecurity concerns facing businesses today. Cyber criminals continue to gain access to all manner of low-cost tools to help in their frauds, from ransomware that will hold data stores hostage to audio deepfakes of executives.

Despite growing investments in cybersecurity, there’s a good chance that many insurance clients are not prepared for the next wave of cybercrime. By demonstrating expertise in the cybersecurity risk management, insurance communicators can position their organizations as potential partners for one of businesses’ greatest concerns.

  • Break down how complex regulatory changes, such as the California Consumer Privacy Act, might impact an organization’s data liabilities. Offer ongoing guidance in a brief, easy-to-understand format.
  • Designate a cybersecurity expert to act as a spokesperson for the company, addressing the latest cyber risk trends and tackling frequent client questions.
  • Develop industry-specific guides on common cyber vulnerabilities and ways to address these risks.

When it comes to cybersecurity, there are many risk management questions that insurance communicators can help businesses to address as they build their organization’s profile.

Making Smart(er) Predictions

Risk management support has always been an important part of insurance industry narratives. But more and more, insurance companies are moving into risk prevention, getting ahead of potential disasters and, when possible, avoiding certain situations entirely. This is, in part, a reaction to the hundreds of billions of dollars lost to natural and man-made disasters over the past decade. Losses in 2019 alone hit $140 billion.

Advances in data technologies have been crucial to these efforts. Today, insurers can use AI to better predict the course and impact of hurricanes and other natural disasters. They can unlock insights from unstructured data to inform underwriting, or use telematics to drive safer behaviors.

This all gives insurers a greater role in helping prevent disasters – which also means a shift in what and how they communicate to clients. The insurers who can demonstrate they have the best data informing their decisions will take the lead.

  • Advise clients on how to use today’s analytics to prepare for tomorrow’s more autonomous future. How will the coming changes to mobility impact their risks?
  • Develop data-driven regional guides on the climate change risks that clients face and how they can address. Go further and hold boot camps in the region to help them take those steps.
  • Uncover hidden risk factors through telematics. What surprising behaviors are associated with claims?

While each organization will have different capabilities in drawing insights from raw data, insurance communicators should be able to develop POVs on the factors they’re focused on for the rapidly approaching future. These will likely be the same questions that insurance customers are focused on for their own success.

The Next 10 Years

Although technological change in insurance can seem slow at times, just like other industries, it’s facing many questions about the use of these technologies. AI’s rapid development and implementation, has also led to the algorithmic biases. Telematics have raised concerns about privacy. Bots might open the door for fraud.

Even with these challenges, the potential value of insurtech is too high to pass up. As organizations continue to transform and insurers play bigger roles in prevention, reassurances will also need to be made. With customers’ and regulators’ growing understanding of these issues, PR and marketing professionals will need to delve further into the connections between data, consumer rights and decision-making.

There’s no question that insurtech is here to stay. It’s those who can show how it can be used intelligently and responsibly that will ultimately tell insuretech’s story.