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The insurance sector will be disrupted by upcoming providers that use technology platforms to allow them to compete despite having no experience, according to a third of insurance industry professionals.
Research from event organiser First also found 72% of insurance professionals expect an increase in the number of products launched, with 15% expecting a “dramatic” rise in the number of insurance products.
Technology is being used by insurers to help create customised policies. For example, insurers can use data generated from smart devices to set insurance prices and reward customers based on the data collected about user behaviour.
In 2015, Accenture’s report Technology vision for insurance 2015 – Stretch your boundaries found that around three-quarters of insurers view personalising customer experience as a top priority.
Accenture said wearable technology can be used in health insurance, with fitness bands monitoring health, while vehicle insurers can embed devices in cars to reward drivers for safe driving.
In 2014, Forrester Research warned that insurers are under threat from non-traditional competition, partly due to their slow take-up of the latest technology.
In its Trends 2014: European digital insurance report, Forrester Research said companies in manufacturing, utilities and telecoms, as well as startups, could take business from traditional insurers.
The retail banking sector is currently seeing disruption with new suppliers using technology to give themselves an advantage against big banks. Traditional banks often have old systems that hold them back from quickly releasing products and services. The same thing will happen in the insurance sector.
Mark Riches, managing director at First in the UK, said insurers can turn these trends to their advantage.
“These are exciting times for the insurance sector, and our research shows that many are embracing the changes,” he said.
“We have seen a significant increase in the number of events we organise for insurance professionals as they look to develop a better understanding of the new landscape they find themselves in, and the opportunities this presents.”