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Insuring the programmable world | Insurance Blog


As we move into a new phase of innovation after the disruption caused by the COVID-19 pandemic, insurers need to look ahead to determine what their technology priorities should be today. Our 2022 Technology Vision report focuses on the expansion of the digital world and the increasing overlap between physical and virtual reality. One of the trends I think is most relevant to insurance carriers is Accenture’s vision for the Programmable World.

In the report, Accenture found that 74% of global executives said that the number of IoT or edge devices deployed in their organizations significantly expanded over the past three years. With that data in mind, insurers need to understand how their products and customer interactions can stand out in an increasingly digitalized reality.

If insurance leaders want to pull ahead, they need to focus on functionality rather than novelty. A truly programmable world will rely on robust technology that drives efficiency and engagement while measurably reducing cost and effort. The question isn’t, “How do we develop new offerings to show that we can keep up with the latest technology?” The question needs to be, “How do we design or adapt products and processes to deliver the most value to customers through a programmable world?”

There are two insurance use cases that I believe will be heavily impacted by innovation towards a programmable world: customer interactions and embedded commercial insurance. The implications of augmented reality (AR) and technology like programmable materials may change the way both personal lines and large commercial carriers do business.

Reimagining customer interactions

For personal lines carriers, AR and IoT technology offer new opportunities to personalize the customer experience and improve the claims process. We’re already seeing automotive insurance carriers adopt IoT technology such as connected telematics devices to offer more personalized, usage-based insurance. This application sets a precedent for the rest of the industry with property insurance not far behind.

Innovation in this area is already happening with offerings like Allianz Partners’ Visi’Home, which the company launched in France back in 2020. Visi’Home is a video diagnostic service that supports customers remotely in the event of damage to their home or possessions. Support personnel can assess damage and connect customers to repair resources without having to dispatch anyone directly. They can also initiate the damage settlement process based on the video assessment.

With AR glasses technology, for example, this process could happen in real time, potentially without the intervention of a human agent. AI could scan for damage and make recommendations to the customer, giving a list of resources or initiating a phone call to a nearby technician and letting the customer know what their policy covers, all in the moment.

IoT solutions and innovations that break down barriers between real-world behaviors and digital data collection could also enable insurers to understand and support their customers on an increasingly personal level. Computer vision, speech recognition, and wearables can enable the environment to respond to individuals as they move through it. One example given in the Technology Vision report is a set of stairs flattening into a ramp as a wheelchair user approaches. Technology like this could make spaces safer, changing the ways we insure things like homes, vehicles and small brick-and-mortar businesses.

Understanding how customers interact with the environment is also meaningful for life insurance carriers, though data ethics and privacy needs to be at the forefront of this type of innovation.

Customers are used to what Tech Vision refers to as a “virtual lifestyle” during the pandemic—interacting with coworkers, friends, and brands often exclusively online. The metaverse will allow us to engage in a virtual lifestyle in new ways, similar to the rise of social media which enabled us to build virtual lives in the first place. Carriers should focus on extending the convenience and personalization of the virtual world into customers’ everyday lives: enhancing customer wellbeing and streamlining interactions through new technology.

Embedding insurance in enterprise operations

After the publication of last year’s Insurance Technology Vision, I discussed how digital twins can help insurers with distribution, underwriting, operations and claims. Through data from IoT and 5G connected devices, digital twins can provide data and context about the environment in real time.

In my previous post on this topic, I gave an example of digital twins giving deeper context around auto accident claims. I see a similar application for digital twins in commercial manufacturing and warehouse settings. With digital twins, each piece of machinery in a factory or vehicle in a fleet could continuously generate data around risk like wear and tear and let workers know when equipment needs to be serviced.

For workers, digital twins coupled with AR and IoT technology can also increase safety on the job, changing the way carriers underwrite worker’s compensation insurance. Another compelling example from Tech Vision: a worker moving through a factory can see an overlay of potential hazards using AR glasses and machines can be shut off and turned back on remotely as they walk past, reducing the chance of on-the-job accidents.

However, outfitting entire factories and workforces with IoT hardware will be a costly endeavor. This is where computer and machine vision come in, allowing insurers and their customers to “leapfrog” ahead by eliminating the need to fully equip spaces and individuals with physical hardware. Advances in machine vision make it easier to leverage visual data to run diagnostics and assess risk. Rather than relying on wearables and integrated sensors, commercial operators can use a network of cameras to perform similar work. Companies like Basler and Qualcomm are already developing plug-and-play solutions with powerful cameras and integrated machine learning systems that conduct advanced object classification and facial recognition.

With continuous risk-related data  made available to both commercial customers and carriers at all times, underwriters have far greater insight into risk, enabling more customized and cost-effective premiums and products. In the programmable world, insurance risk assessment can be baked into every part of an organization’s operations.

Looking to the future

A programmable world presents a host of opportunities for insurers to get closer to their customers and the assets they’re insuring through more direct, real-time access to data. It will also empower insurers to respond to customer needs faster and process claims much more efficiently. Overall, a programmable world might be a safer and perhaps more predictable world. With that in mind, insurers can think about how they can be pioneers of this safety-enhanced, reduced-risk reality.

If you would like to discuss your digital strategy and enhancing your capabilities for a programmable world, get in touch with me.


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Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consultation with our professional advisors.
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