News & views

Wednesday, July 20, 2016

With a whole array of smart devices set to revolutionise insurance from the ground up, we speak to NIG Head of Claims Rob Smart about the impact of technology on the industry – and how NIG has been harnessing the power of innovations to make its claims process faster and more secure.

Technology has always been a powerful force for change in the way all kinds of sectors operate – and insurance is no different.

In a recent poll[SC1] , a large portion of the insurance industry revealed its preference for older tech when several operators identified the telephone as their main business communication tool.

More than half – 52% – of participants in the survey said they preferred communicating with customers on the phone, while 48% thought email was best. Almost no one opted for social media, despite the fact that such channels are increasingly favoured by the younger digital generation.

But things are changing fast and the future holds some incredibly exciting prospects for brokers and insurers, from drones able to assess damage in hard-to-reach locations to smart systems that enable everyday objects to interact with each other. 

In fact, observers have coined the term insur-tech[SC2]  to describe the rapidly expanding array of devices and innovations that are already helping us to better serve our customers.

Connected devices
As the amount of technology available for the insurance sector to use increases, there will be a growing demand for these devices to have the ability to interact with each other.

This is where the Internet of Things (IoT) will really come into its own. An online system that allows everyday objects to connect up and exchange information, the IoT is already being trialled in exciting ways.

It allows us to turn on our home heating from our smartphones while we’re sitting on the bus, and will soon enable smart cameras in our fridges to notify us when we’re out of milk or when food reaches its sell-by date. But the IoT is so much more than this. It could see the creation of digital parking spaces that send out signals to nearby drivers when they become available and allow farmers to monitor crops remotely.

Over the next few years, it could be used to mitigate the effects of an accident before it becomes too costly to repair. For instance, sensors on our pipes connected to the IoT could detect water leaks, and send automatic alerts to homeowners, insurers and repair crews, reducing the likelihood of floods and major damage.

“The Internet of Things will play a crucial role in helping to bring all our devices together as we start to work with increasing amounts of technology.  It will see technology in our homes communicating through a shared network” says Rob Smart, NIG’s Head of Claims.

Updating legacy systems
Across the insurance industry as a whole, research from Insurance Age [SC3]  shows that most brokers have long since made the shift to online, and many have even started to drive business through the use of smartphone apps.

Many have also equipped legacy systems with voice-recognition capabilities that render the need for time-consuming security checks redundant by automatically verifying the identity of a customer through their voice.

At NIG, we’ve been using an online motoring portal called Activeweb, which allows customers to see real-time updates of their repairs, and receive text alerts with information on when their vehicle is likely to be back in action. 

This has helped to improve communication between brokers and customers as well as making the whole customer experience more transparent than it has ever been.

From sci-fi to fact
But by far the most exciting developments are those which are just on the cusp of emerging into common use.

For instance, many brokers may consider drones to belong more to the realm of science fiction than to that of serious business. But several observers[SC4]  have predicted that these unmanned aerial devices will soon be commonly used as a way of surveying large areas of damaged property, such as farmland or commercial storage facilities.  Indeed this is already a reality in assessing flood damage in hard to reach places.

In the near future, drones will also be used increasingly to assess claims areas, with innovations such as the Stormscoper already helping specialist surveyors to validate storm damage. This has simplified the claims process for customers who have suffered property damage, and allowed insurers to validate claims much more quickly.

Power of the cloud
Here at NIG, we’ve been quick to use technology to improve the way we serve customers. For example, the With You In Five system is being used to deal with less complex property claims and was adopted from Direct Line Group (DLG) is helping us to speed up the way we operate. This draws on the power of the cloud, a network of servers that stores information so it can be accessed remotely from anywhere in the world.

This means that non-specialist people can visit claims sites to take photos and then upload them to the cloud for claims handlers to assess back in the office.  

“This makes our claims faster enabling a much more customer centric approach to claims” says Rob Smart.

“It does this by assessing damage and will cut down on paper trails,” he adds. “And the fact it came to us from DLG shows the benefits of being part of a big insurance company brings in helping us to stay one step ahead of the competition.”

Effect on SMEs
Perhaps the area in which insurance technology will have the biggest impact will be on small to medium-sized enterprises (SMEs), with the Department for Business, Innovation and Skills pushing for SMEs to become more digitally aware[SC5] .

Insur-tech stands to transform the whole insurance journey for businesses, from the way they choose the policy that’s right for them to how they make claims. It will make insurance more responsive and improve efficiency, which will have the knock-on effect of reducing uncertainty and making it less likely firms will suffer a loss of revenue due to mishaps and accidents.

As Rob Smart explains: “These are incredibly exciting times for the insurance industry as these cutting-edge innovations start to transform the way we work.

“Businesses will see their end-to-end insurance journey radically altered due to developments that allow them to carry out a whole range of actions at double the speed of previous systems, often simply by pushing a few buttons on a smartphone.

“This will make insurance faster, more secure and ultimately lead to the creation of a vastly improved service that’s better equipped to meet the demands of the modern business.”