The insurer of the future

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The digital transformation of the insurance industry is underway. What will the insurer of the future look like?

Technologies such as the Internet of Things, Big Data Analytics, Robotics and Artificial Intelligence are already making an impact. But where will this end? What will the insurer of the future look like?

I’ve addressed this question in detail elsewhere (see links below) but here’s a quick summary.

Auto/motor insurance

Driverless cars, coupled with remote control technologies and the shift to “vehicles as a service” will mean that the insurer of the future does very little business in the auto/motor market.

Insurers that remain focused on this segment will either shrink dramatically or fail.

Underwriting and pricing

If I were a young actuary or underwriter I’d be worried—because the insurer of the future won’t have much need for my skills.

The insurer of the future will have experience data on its internal systems. It will tap into vast amounts of additional data available from external sources.  And it will channel all of this data to its artificial intelligence (AI) engines, wired directly into the sales and underwriting processes.

There will be room for some human oversight roles, but the vast majority of actuaries and underwriters will no longer be required.

Claims handling

The insurer of the future will:

  • Detect claims automatically using IoT
  • Use AI to analyze those claims, set reserve values, and manage external supply chains
  • Automatically manage payments, recoveries and reinsurance

In due course, as the abilities of cognitive/AI systems surpass those of humans, claims personnel will no longer be required.


The insurer of the future will use blockchain to:

  • Underpin smart-contract enabled parametric insurance products
  • Enable innovative micro-insurance products
  • Maintain secure policy records at significantly lower cost than current systems

Customer relationship management and marketing

The insurer of the future has access to enormous quantities of data about its customers, available from a wide range of external sources. It ports this data into its own systems, fueling powerful analytics.  It uses the insights gleaned to reach out proactively to customers, not just to sell them products, but to provide genuine value adds.

This enhances its customer relationships—driving lower lapse and churn rates, a greater share of wallet, and higher satisfaction.

The insurer of the future’s customer won’t have to buy individual products. Instead, she’ll buy a total solution which flexes to her needs hour by hour. And she’ll be billed according to her actual usage, so she’ll never be under, or over, insured.

Products will be created from a series of modules, enabling new products to be developed quickly and easily. Real time analytics and artificial intelligence systems will automatically design and build new products, monitor take-up, and iterate them as needed until sales are optimized.

AI, robotics and other automated systems will empty the insurer of the future of people. It will need to figure out what technologies to apply where, and in what order, to create the highest return on investment.

With so much automation in place, the insurer of the future will have far fewer employees. But the remaining humans, fulfilling key strategic and risk management roles, will be far more important than they previously were. They will have to be the very best professionals available. And they’ll have self-help tools at their fingertips, together with expert systems support, world-class knowledge management capabilities, and collaboration tools—all helping ensure they can deliver to their full potential.

Agents and brokers need to understand a customer’s needs, search for a product that fits, complete the paperwork, handle the financing, and issue the policy. All of that can be done by artificial intelligence—and for the insurer of the future I believe it will be.

Because automation will increasingly take center stage in the insurance industry, the industry must adapt to become more customer-centric: put customers at the center of their business, get products to market faster, and improve operational efficiency to lower costs. The key to meeting the future head-on and becoming more competitive is to take full advantage of innovative technologies and to invest in the people behind those technologies—because ”technology is nothing without the people behind it.”


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