Technology will profoundly alter the primary insurance value chain

Fundamental change in the insurance business model

Technological developments have the potential to profoundly change the way in which the re/insurance industry develops, distributes, underwrites, and administers the insurance protection it sells to consumers. The graphic above shows just a few examples of how technology can disrupt every stage of the insurance value chain.

The key catalysts for change begin with the growing preference of end-consumers to transact through their mobile devices. We also anticipate that interaction with computers will become more natural, for example employing conversational systems and digital advisors. The amount of data on people and objects is already staggering and we expect this to only increase through such advances as the so-called “internet of things” and telematics.

Insurers may be able to adapt their business models by using the common and secure use of distributed data (the so-called ‘blockchain’ technology), and increasingly they will be able to recognise patterns in large and unstructured data through artificial intelligence.

In combination, these technologies are expected to have an impact on the whole of society — and insurers will not be excluded.