Insurers: Ignore the FinTech Revolution at Your Long-Term Peril As customers demand personalized insurance products and companies increasingly look to cut costs, the rise of FinTech in the insurance industry (InsurTech) is a disruptive force that should not be ignored, a new PwC report asserts.
Is the End of Auto Insurance Premium Near? Auto accidents remain a regular, costly—and often tragic—part of everyday life. However, a variety of factors—including collision avoidance, telematics and autonomous vehicle technology—are combining to reduce the frequency of auto accidents, and with them the number and size of claims. This would have interesting effects on pricing and overall premium received by insurers even if the decline were slight. A new Celent report suggests that the decline will be significant over the next 15 years—and eventually catastrophic.
Machine learning for UBI: An optimal path to insurance ratemaking? Anyone who relies on automated vehicle navigation systems while driving in congested traffic knows to disregard the principle that the shortest distance between two points is a straight line. One-way streets, missed turns, and dubious directions often make reaching a destination by car seem to take far longer than by foot.
Allianz Believes Blockchain Tech Will Spur Catastrophe Bond Trading German insurer Allianz expects the technology underpinning virtual currency bitcoin to encourage trading in catastrophe bonds, which transfer the risk of natural disasters such as hurricanes to investors. “Cat bond” payments between insurers and investors can take weeks or even months after a storm hits, but the use of “smart contracts”—agreements that are automatically executed via the blockchain when a set of predetermined conditions are met—could cut this down to hours or a few days, Allianz said.
A harder road ahead for Commercial Auto While the story for commercial lines in general continues to include overall softening conditions as excess capital and capacity drive competition, Commercial Auto/Trucking is heading in the opposite direction, with some companies exiting parts of the market and rates generally on the rise.
Analyzing Allianz's Blockchain Pilot Bitcoin has generated a lot of press due to its volatile value and the often dramatic nature of news stories regarding heists or illicit usage. But many people, Novarica included, have long considered the underlying technology, called blockchain, to be the real area of interest and potential future platform for the insurance industry. Allianz’s recent implementation of a blockchain-based CAT bond shows exactly how the technology can be used not to disrupt the industry, but to build trust and accountability in an existing marketplace.
Can Insurance Innovate? It’s a simple question — can insurance innovate? Think about your answer; I will give you mine at the end of this post. Here’s a quick story from an insurance book that helps set the stage for how the industry got to where it is today: There once was a membership association called the American Insurance Underwriters (AIU). The AIU acted as an agent for member insurance companies in international markets. Each member insurance company held a percentage of the AIU pool by which payments and liabilities were assigned.
Millennial consumers, mobile use and insurance sales You’ve seen them on their smartphones at the dinner table, during work, at parties, even in the movie theaters while "watching" a movie. Millennials, or those born between 1981 and 2000, have not only taken over the workplace. They are now your biggest market and opportunity.
Navigating a Path to 'Jubilescence' LIMRA and Maddock Douglas embarked on a study that unveils significant findings among mass-market consumers and their attitudes about “retirement.” Retirement is in quotes because the notion of traditional retirement, that is, the stoppage of work at a set age, and saving up enough in advance to prepare for it is likely passé, perhaps even irrelevant. There is significant opportunity for providers who can crack the code in the mass market, also known as the “middle class.” This study aims to learn about the middle class, not from a demographic point of view but from an attitudinal one. Some significant findings include: Middle class is a state of mind, not an asset or income level.
The Three Pillars of Connected Insurance in Italy High connectivity is one of the hallmarks of the modern society. At any moment in time, individuals are plugged into society through the range of devices, which as well are constituting a complex ecosystem of smart connected things. As fairly stated in Harvard Economics Review, “Consumers are becoming more and more connected whether it is at home, at work, behind the wheel, when they engage in sports and leisure activities, and so on. This is happening quite fast, due to the adoption of smart devices, and companies have to be able to react accordingly in order to maximize value both for their clients and for themselves.”