With paper forms and lots of phone calls, insurance is not exactly known as a high-tech industry. But that’s not going to be the case forever. Whether it’s emerging technology like artificial intelligence, or day-to-day technology like the camera in your phone, we think that insurance is going to go through some big changes in the future. Here are just a few of the things we might see:
Taking the pain out of signing up
The process of signing up for insurance hasn’t changed much in the last ten years or so. Subpar online experiences, long waits on the phone and a little too much paperwork. 😴
This is going to change soon, though – and in many cases, it’s changing already. For example, when you get a quote from Cove, you don’t need to fill out a bunch of forms. You just interact with a chatbot through Facebook Messenger, or our simple web forms. Much easier and much less boring. As technology progresses, we expect we’ll be able to have chatbots like ours do much more than they currently do.
Here’s another example: most people are carrying a fairly sophisticated computer, GPS tracker and camera. Also known as a phone. While the industry as a whole has been slow to start using these features, here at Cove we’ve been putting them to work to do things like:
- Using a photo of an item to prove that you own it
- The ability to send in photos of receipts
- GPS to make it faster to input your address
All these things make it faster and easier to sign up for insurance.
Better information to bring down premiums
Insurance is all about risk. The less risk an insurer is taking, the less that insurer has to charge you. A lot of this equation comes down to uncertainty. The less insurers know, the more conservative they’re going to be – and that means higher prices for you.
Emerging technology will provide insurers more information about their customers. One great example is devices in cars that monitor things like speed and whether you follow the road rules. This gives your insurer live, up-to-date information about how good a driver you are. If you’re a good driver, you’ll pay less in insurance premiums than a bad driver. This takes some of the guesswork out of insuring you, which means insurers can more confidently charge lower prices – in exchange for more of your information.
Apps for sharing
The sharing economy continues to grow, with people renting out spare space in their homes and cars through apps like AirBnB, Zoomy and Uber. This means that there’s less of a line between personal items and business items. Most of the time, your spare room is just a spare room, but if you rent it out a couple weekends a year, it’s effectively a hotel, and may need different insurance.
One expensive way to solve this problem would be to get commercial insurance. But that’s kind of like bringing a gun to a knife fight. If your spare room is just a spare room 50 weekends a year, then that commercial insurance is overkill the vast majority of the time.
In the future, we think the insurance industry will manage this using apps. For example, you could have an app on your phone that you toggle whenever you’re renting out your spare room. When your guest leaves, you’d turn it off. The insurance company would then know to charge you for commercial insurance for the time the app was on, and standard insurance for the time when it was off.
That means you get the coverage you need, but you don’t have to buy more coverage than you need for the 90% of the time that your room was just for personal use.
Self-driving cars dropping down premiums
Want to know the most dangerous part of a car? Bad news: it’s you. Mistakes by drivers are by far the main cause of car accidents.
So what happens if (when) we make the shift to self-driving cars? If we can take out the most dangerous part of driving (the driver), then it follows that we’ll have fewer accidents. Fewer accidents means insuring cars will be less risky for insurance companies, which means lower costs for people who want to insure their cars. Not bad!
When you think about it, insurance is quite similar to other industries when it comes to new technology. Insurers who embrace connectivity and automation can provide more flexibility, get better information, and ultimately lower fees for their customers.
We think that’s something to look forward to! 😉