Artificial intelligence. Self-driving cars. The internet of things. The future of insurance is more technologically advanced – and complicated – than anyone ever expected.
We recently spoke with Argo’s senior vice president of digital Andy Breen and head of group operations Jeff Radke about what to expect, tech-wise, from the future of insurance – both in the near term and the decade to come.
Q: What do you see as the hottest trends five years from now in insurance?
Andy Breen: Automation and finally making use of all this data we have. As a data-driven business, we have the ability to actually apply new technologies, algorithms and approaches. You can imagine the flood of data Google, Facebook and Twitter receive, and they had to completely reinvent data science and data analysis. We’re now able to take a lot of the spoils of that invention and apply it to another business that has massive amounts of data and do a lot of things based off that data.
Jeff Radke: The really exciting thing is the ability for your algorithm to learn based on the data.
Breen: If we follow what’s happened in language analysis and image recognition, it actually can be better than human perception. That’s kind of interesting and kind of scary, in some ways.
Q: How about longer term – 10 or 15 years from now?
Breen: The distribution chain is breaking down and morphing. Now, I don’t think it just means digital entrants and new upstarts. I actually think there are quite a few companies well positioned to capitalize on it, and it is happening at a distinct pace. I saw what happened to media and advertising, the music industry, and the hotel industry. Everyone’s completely paranoid about it now.
Radke: Hyper-segmentation. Insurance based on usage rather than for a calendar period.
Breen: Right. One thing I’ve learned in the industry is that we don’t have to just sell based on traditional annual or multiyear policies.
Radke: Though we may never get there because chance has such a big role. I may perfectly know what your long-term or medium-term odds of a car accident are, but I don’t know about tomorrow’s outcome very well, right?
Breen: The idea that I bring up an app and say, “Oh, I’m going outside right now, and it’s a hailstorm, so I have to flip on the life insurance,” right – I think that’s impractical.