/How top tech trends will transform insurance

How top tech trends will transform insurance

Summary: Over the next decade, the fully tech-enabled insurer will bear little resemblance to today’s organization.

Original author and publication date: Krish Krishnakanthan and Doug McElhaney, September 30, 2021

Futurizonte Editor’s Note: AI, not humans, will now be in charge of insurance and AI will responsible for risks

From the article:

A handful of accelerating technology trends are poised to transform the very nature of insurance. In auto insurance, risk will shift from drivers to the artificial intelligence (AI) and software behind self-driving cars. Satellites, drones, and real-time data sets will give insurers unprecedented visibility into the risk around facilities, leading to greater accuracy. Claims processing after natural catastrophes will be automated, infinitely scalable, and lightning fast. The life insurance industry will bring to market “wrapped” products that seamlessly adjust coverage based on the evolving needs of their customers.

These scenarios aren’t science fiction. The technologies behind them already exist, and innovative offerings could become mainstream in the next decade.

Our analysis explored the impact of ten rapidly accelerating trends most relevant to competitive advantage.1 Of these ten, five are poised to reshape the insurance landscape: applied AI, distributed infrastructure, future of connectivity, next-level automation, and trust architecture. The prevalence of these technologies also means insurers could face heightened competition from a new wave of digital attackers, as evidenced by the large number of greenfield insurers founded in the past three to five years.

To survive, incumbents will have to adapt their operating models, products, and core processes to a new reality. All executives must understand the impact of these technologies and ensure their organizations are positioned to unlock their potential. Leaders will need to let go of entrenched perceptions and business models and embrace new ways to manufacture and distribute what will in many cases be fundamentally different products.

The past few years have seen the emergence of core technology trends that are affecting nearly every industry. A multitude of technology advancements and shifts are reshaping products and services.

McKinsey examined a range of factors to identify the ten technology trends that matter most to top executives across industries (Exhibit 1). For every trend, we calculated a momentum score based on the growth rate of the technologies underlying the trends, which we derived from an in-depth analysis of six proxy metrics: patent filings, publications, news mentions, online search trends, total private investment, and the number of companies making investments.

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