A new report by Fitch Ratings has outlined the ways in which emerging technologies are to continue shaping the personal insurance landscape.
Fitch determined that auto Insurance is the segment most frequently manipulated and influenced by tech innovation with current improvements to safety – rear-facing cameras, sensors, parking assist, collision avoidance technology etc – contributing to a decline of long-term accident frequency.
The development of technologically-driven societal advances such as self-driving cars and the proliferation of ride-sharing practices will likely change the risks related to automobile transportation and insurance demands.
According to Fitch these advances have the potential to alter longer-term revenue and profit fundamentals of auto insurance.
However, it is by far the most advanced segment in the application of new information technology and is expected to continue adapting to future fluctuations.
The homeowners market is also utilising a wider spectrum of tools and information sources to interact with policyholders and understand risk, Fitch says.
Over the longer term, underwriters’ performance is expected to benefit from growing sophistication in risk modelling and the managing of catastrophe exposure aggregations.
Enhanced analytics and other operational efficiencies will boost performance in pricing adequacy, claims administration and fraud prevention.
Fitch indicates that drones are more frequently used in the underwriting application process and remote claims assessments, while a proliferation of digital devices and sensors has the potential to add value in risk prevention in home security and fire and water damage prevention.