Technology is changing nearly every facet of life and that includes the business community. More often than not, technology impacts businesses for the better. Some businesses in the insurance industry are definitely benefitting from technological advances. For many in the industry, the pace at which they are adopting new technologies has been slow compared to the demands of most customers. One reason for this demand is that millennials are now a new customer base for insurance companies. Many millennials are now of the age where they are beginning to purchase their own car and health insurance. Some are purchasing homes and some are even starting their own businesses. What the industry has to deal with is the fact that millennials want to purchase coverage on their terms. More frequently the place they want to buy coverage is online and via a mobile device. Because millennials are demanding more out of their relationships with insurance companies many businesses within the industry are beginning to listen to their demands.
The ways in which technology are impacting the insurance industry are very widespread. Some of the ways it is impacting the industry deal with the ways in which agencies and carriers interact with their customer base. Other ways it is impacting the industry is new technologies that need to be insured like self-driving cars and drones. Here are five specific ways in which technology is impacting the insurance industry.
The use of Drones
In 2015 more than 700,000 drones were sold in the United States. These drones are being bought by businesses and consumers alike. Most people who are purchasing them see them as a recreational tool or a tool they can use to enhance their business. Most do not see the liability implications for using this new technology. For example, many insurance carriers are already using drones to access the severity of damaged properties. Other businesses may be using them to get a birds-eye view of the properties they are working on or managing. Drones can be a useful tool until something goes wrong and like most things in business and in life, eventually something goes wrong. How well these individuals and businesses prepare for these occasions can determine how much these mistakes cost them or their business.
Online and Mobile purchasing options.
In todays’ business environment, customers want to research and buy coverage on their terms. Twenty years ago most insurance policies were purchased in person or over the phone. Now most millennials are comfortable researching and even purchasing coverage all with their mobile device. Some are even comfortable going through the entire process without so much as speaking with a human over the phone.
The Sharing Economy
Many industries are now being turned totally upside down by the sharing-economy. Hotels, Rental Car Agencies and taxis are just a few industries being severely impacted by the sharing-economy. Take Airbnb for example, this company allows people to rent out a portion of their house or the entire house when they are on vacation.
Many people don’t have general liability insurance nor do they have the proper type of through their homeowner’s or renter’s insurance. If your insurer found out you were using your house as a makeshift bed and breakfast, your policy was likely to be cancelled. For the time being this does not seem to stop many people from using this service.
Auto insurance is due for a dramatic shake-up in the near future. Self-driving cars could take a huge part of the auto insurance market out of the equation. Removing drivers from the equation turns the liability issues upside down. As more self-driving cars hit the road, insurance companies will have to iron how who is liable for what when an accident happens involving a driverless car.
Data Breaches are no longer just a big business problem
Small businesses are now a target for hackers who want access to peoples’ sensitive information. Far too many business owners make the mistake of thinking they are too small of a company for criminals to bother with hacking. Because of this belief, many small business owners fail to properly protect their networks and fail to purchase adequate data breach insurance. That is exactly what hackers want them to think. More and more frequently cyber criminals are first hacking into smaller business, hoping those businesses have some type of relationship with a bigger business who might allow that business access to their larger data base of customer records. Two of the biggest data breaches in history, Target and Home Depot, were started just this way.
Mitchell Sharp is a Marketing Associate for General Liability Shop. Mitchell has expertise in workers’ compensation and cyber liability insurance. He has a passion for using his knowledge of commercial insurance and digital marketing to benefit the small business community. @GenLiabShop.