10 October 2018

Commercial Risk Europe: Geneva Association study sees changing role for insurance in the digital age

The role of insurance in society is changing from one that is concerned primarily with loss indemnification to a broader advisory service for customers on how to prevent, mitigate and manage their risks, according to a study by the Geneva Association. This is as a result of the economy, including insurance, becoming more digitalised.

According to the report, Insurance in the Digital Age: A view of key implications for the economy and society: “The greatest source of value creation through the digitalisation of insurance lies in the ability to develop new and more customer-centric products and solutions. At the same time, by lowering the cost of information gathering and processing, digital technology and automation will enable insurers to increase the efficiency of administering, underwriting and pricing risk, and settling claims.” It adds that in a competitive market, this will ultimately lead to lower premiums, boosting affordability and coverage.

Anna Maria D’Hulster, secretary general of The Geneva Association, commented: “Accelerated digitalisation and the growth of connected digital environments create new vulnerabilities and potential consequences that are less predictable than they have been to date. Digitalisation and new technologies can help to improve access to insurance by making it more affordable, easing distribution, creating new markets and thus bringing the benefits of insurance to new customers.”

The report explains: “Digitalisation is widening the role of insurers, allowing them to evolve from pure risk protectors towards risk predictors and preventers. Digital technology provides insurers with the opportunity to use real-time monitoring and visualisation that will fundamentally change the insurers’ relationship with customers. An increase in the amount of information and knowledge available to society could lead to a decrease in the frequency of some risks, such as vehicle accidents, and may even cause some risks to disappear altogether if they become totally predictable. On the other hand, other newly emerging risks, such as cyber, will increase.”

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Insurance in the digital age

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