2016 has undoubtedly been a year of widespread global change, from the turbulent political landscape to the rapid pace of technological development.
But what are the trends and upheavals impacting the insurance industry, and what can we expect from the coming year?
Technology is already changing the face of the industry, with insurers scrambling to jump on board with digital.
The gamification of insurance through apps and telematics is growing, and on-demand insurance is increasingly in demand.
But the next big thing in insurance may be even more futuristic.
Augmented reality (AR) and virtual reality (VR) are set to become key emerging risks in the industry, according to Matthew Smith, director, global insurance strategy group at KPMG, who said that information security, as well as health and behaviour will be the main associated risks.
“We’ve estimated that the AR/VR market for insurance will be about $20 billion by 2020,” Smith told
Insurance Business.
That figure is based on an estimate that just 1% of the overall cyber crime market – which looks to be worth around $2 trillion by then – might come from AR and VR.
The emergence of sophisticated analytics, and the capabilities that enable big data, machine learning, and robotics, will also be a big driver for change.
But Smith warned against jumping into these technologies without a clear purpose: “You can use a whole bunch of buzzwords and guess what everybody is doing, without really knowing how they apply it to their business,” he said.
There will also be an increased dependency on collaboration, as insurers look to leverage partnerships and collaborations to embrace technology and digital.
Meanwhile, as the steady stream of political change looks set to continue, it will provide a rocky backdrop to the industry.
“In 2017, I think we’re going to see certainly more of the same,” Smith said, explaining that events such as Brexit and Trump’s election have implications across the industry.
“I think it’s going to be very interesting to see how the political landscape plays out,” he said. “But anybody that tries to predict with precision is going to be precisely wrong.”
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