Tech Trends

The Top 10 Ways Emerging Tech Will Transform Insurance

Managing a massive upheaval and transformation in the business world

by Mark Breading

Mr. Breading is affiliated with Strategy Meets Action, a consultantcy ‘dedicated to helping the insurance industry modernize, optimize, and innovate to effectively support today’s needs and position for the business demands of the future.’ Reprinted with permission. Visit

Will the unrelenting advance of emerging technologies in the world really transform insurance? That’s the big question.

In general, the world of business is undergoing massive upheaval and transformation. It may be tempting to think that insurance will be less affected than other industries by the technology-driven changes in the world, but that would be a huge mistake. It’s true that the industry has some built-in barriers to rapid change, including regulatory regimes and the need to have a deep understanding of various risks before changing products, services, or operations.

But those barriers are often used as an excuse for not actively assessing the change going on around us and not engaging in innovation. Insurance won’t change tomorrow, but there is a real danger that many companies in the industry will wake up three to five years from now and find that they are losing the competitive battle.

A wide range of new tech

To stimulate thinking about how the industry might be affected and planning accordingly, SMA has published a new research report, The Top 10 Ways Emerging Tech Will Transform Insurance. This report considers a wide range of technologies such as the Internet of Things, wearables, drones, and driverless vehicles, along with artificial intelligence, blockchain, and many others.

These will combine in many new ways to transform every industry, and insurance is no exception. All ten of the ways identified are important, but the impact for specific insurance segments and companies will vary considerably.

Bitcoin and Ethereum may or may not survive, but some form of digital currency is likely to make a big impact on the world of money and finance

The Top 10 include business-oriented ways that the industry will change and technology-oriented ways. A technology example is for block chain: Blockchain will become a foundational technology … underlying the exchange of insurance information and contracts.

Some people are predicting that blockchain will rock the world, changing the way we account for and transfer assets, information, and money. They claim it will be as fundamental a shift as when double entry account systems were developed in Italy in the 15th century. Time will tell, but there is certainly great potential and already very significant investment and project activity, especially in financial services. Bitcoin and Ethereum may or may not survive, but some form of digital currency is likely to make a big impact on the world of money and finance.

Blockchain emerging

Just as important for insurers is the potential for blockchain to become the basis for smart contracts and the exchange of sensitive information. The essence of blockchain is that it is a trust mechanism for the exchange of anything of value between parties. Micro-insurance transactions become more feasible with this kind of mechanism, where a third-party, trusted intermediary is not required.

Digital currencies based on blockchain could eliminate exchange rate risk. Clearinghouses for investment transactions may not be needed. The list could go on, but the idea is that there are many potential uses of the technology that insurers should begin to understand and explore.

This report features many other ways that both property/casualty and life/annuity insurance will be transformed and includes recommendations for insurers to help them proactively plan for bridging to the future by building in capabilities that will achieve near-term goals for improvement while moving forward toward a Next-Gen Insurer model.