Imagine a day when insurance is as seamless to every part of our lives in a cost effective manner as turning on a light switch. Thanks to advances in sensors, IoT, cloud computing, and artificial intelligence (AI) technologies those days are closer than many think. With the steady entrance of intelligent assistants like Alexa and Google Home into consumer lives in a few years the majority of consumers will be more comfortable with these devices gathering information about their behaviors. We got used to it with smartphones, I think the same will be true of these devices.
The combination of smart phones, intelligent assistants, connected cars, wearables, and computers will mean nearly every aspect of our lives will be monitored for convenience and next generation user experiences.
One important element of this intelligent future that is often neglected is the need for on-demand insurance to protect consumers and businesses from risk. That risk can be in traditional areas of insurance like a home or car, or homeshare insurance (like Slice pioneered), and cyber insurance. However, it could also include new areas of signal and sensor-based insurance that haven’t been thought of before.
Meet Olivia Insurance Customer of the Future
As an example of what the future could look like with signals and sensor-based insurance, I’ll write about a fictitious character named Olivia. She is going on a trip to pick up a new Bernese Mountain Dog, as she is packing her clothes the sensors in her suitcase notice that she is packing a lot of clothes and sends a message to her smartphone and voice assistant asking if Olivia would like to purchase travel insurance. As Olivia is heading out the door she picks up the puppy collar from the kitchen table and the speakers in her Alexa pick up the jingle from the dog tag and ask Olivia if she wants pet insurance. On her journey into the back country to pick up the dog from the farmer’s house and stay at their Airbnb rental, she runs into heavy traffic because of a downpour and mudslide. Her car analyzes all this information and tells her that there are no alternative routes so she would be best to increase her collision coverage in case of an accident, she agreed. Thankfully Olivia made it to the farm safely and the intelligent assistant in the car automatically returned her insurance to the normal level. After Olivia picks up the Bernese Mountain Dog she was so excited and taking in the beautiful scenery that she decides to hike the local mountain. As she begins her trek up the mountain with her mountain dog, her smartwatch accelerometer alerts her to the fact that the device and her smartphone aren’t covered with insurance for accidental damage. The watch recommends insurance coverage which turned out to save Olivia a few hundred dollars after dropping her phone while taking a picture of her new dog.
The sensors and signals that could protect Olivia are taking shape today, and now is an opportunity for the insurance industry to bring the complete vision of next generation consumer experiences to fruition.
Why Cloud Services is the Key
Underneath this future experience is the fact that cloud computing has made its way into nearly every part of technology today. This technology has the potential to be the next great asset for humanity like electricity and the internet. Cloud computing has allowed companies in diverse industries to begin offering on-demand services. We took the path of insurance, but countless other businesses are innovating using the same building blocks of the cloud and transforming so many areas of society today.
I still think we are a couple years away from insurers widely embracing the cloud in meaningful ways. The driving force for this will be what I started this article with, the customer. As baby boomers continue to retire, and some G-Xers do the same, Millennials that grew up in an internet world will not be as forgiving with companies that don’t use the cloud to fuel convenience, security, and a better way of life. Once insurers understand this, I believe we’ll see many standard-bearers for change in the industry pushing the market forward. Alternatively, this may come about by Amazon, Apple, Uber, Tesla or some other company disrupting the insurance market with their technologies and services. This could be the outside factor that some insurers aren’t taking too seriously. With Amazon’s acquisition of PillPack I think this possibility is very close to reality.
I also view AI as an extension of cloud computing providing greater intelligence to the data that the cloud gathers. AI in the cloud will help power these future customer experiences.
The Way Forward
The insurance industry is at a place where it hasn’t been in a long time – a position to be a leader in driving the future of society, instead of being the dirty dishes in the sink you have to clean. With cloud and AI technology, insurers can start invading technology conferences like TED and sharing why they are just as important to the exciting business and consumer experiences that everyone is clamoring for.
By doing this and not just staying in our own network of insurance events and partnerships I believe this future will take shape nicely and with insurance being a hero again.