The insurance industry is facing new challenges and must adapt for a new era.

December 30 2016
Cyber security

 

As the times are changing, so have the challenges that the insurance industry must address. With new technologies and trends affecting how we live, the insurance industry must constantly evolve to address new types of risk.

The insurance industry is based on determining what constitutes risk, and in today’s world doing so is anything but easy. People pay for the peace of mind that insurance companies offer by minimizing personal risk on a day-to-day basis. Today that “peace of mind” may mean many different things to many people.

As new technologies emerge and consumer trends and preferences change, pricing policies and marketing them effectively is an ongoing and constantly evolving challenge. Some of the most influential trends and developments are mentioned below.

One of the biggest developments in the past few years, and one that is about to have even bigger implications is self-driving cars. Although autonomous vehicles are not yet available to consumers, their impact is already being felt in a big way. These automated systems lessen personal risk and the frequency of accidents, but they also bring into question exactly what constitutes a driver and who truly operates these vehicles — an important consideration for insurers.

Another new development is the proliferation of ridesharing. Ridesharing services such as Uber are changing the way that people commute. The line between personal and employer provided auto coverage for drivers is becoming indistinct. While the industry has taken steps to address these changes, the rapidly evolving market will doubtlessly bring about new challenges going forward.

With so much now relying on the internet and technology, cyber security is becoming a huge issue. Personal internet security policies and enterprise-level cyber risk management are both major areas for potential growth. Insurers must now focus on the security of their own internal systems. Going forward, the ability to protect client data will become a key selling point for insurers across every market.