U.S. Specialty and Property/Casualty Insurance Trends
There are several current and emerging trends in the property and casualty insurance industry. Telematics and UBI, as well as the use of drones and chatbots, are three that have been highlighted here.
Telematics and Usage-Based Insurance (UBI)
- In property and casualty insurance, the use of telematics or smartphone usage-based insurance (UBI) is gaining momentum. They are viewed as being more cost-effective ad personalized as they are based on customers' behaviors and needs.
- Telematics can provide a higher quality of life in offices and homes similar to what is now experienced in automobiles. It will allow insurers to monitor their homes remotely by controlling the appliances and thermostat or by detecting the existence of flooding, fires, gas-leak, or break-ins.
- Telematics provide insights that will enable companies in the property and casualty insurance industry to cut costs, increase revenue, and build better relations with customers. They can be used to connect to in-home video cameras to help conduct checks on the content of the house and assist in the remediation of losses and expedite claims.
- With the help of telematics, insurance companies can set prices based on individual usage, and hence, reduce the premium for at least some customers.
- One company leading the charge is Nodak Insurance through its partnership with Roost. Other companies that have incorporated telematics into its service to customers include USAA, Allstate, State Farm, and Nationwide.
The Use of Drones
- Drones are being used in the insurance industry to better manage risk and reduce operational costs, which ultimately means better customer experience. They are being used to collect aerial data, provide catastrophe response, conduct research and development, provide claims support, and to perform underwriting services. It was forecasted that by 2020, commercial drones will increase to 2.7 million, with the insurance industry being one of the industries to have adopted it very early in the game.
- The use of drones is driven by a well-developed regulatory framework that makes the boundaries clearer for their commercial use. There is also a growing demand for data that is of a higher quality to include photogrammetry as well as geospatial analysis.
- There has been an increase in the demand for drones since data-driven decision-making has been brought into focus over the past few years. They assist insurance companies in delivering better results to customers. Drones are also more attractive because of the development of new technologies to help its adoption in the insurance industry.
- Companies leading the way in that regard are Allstate and State Farm. Drones have reduced the length of time it takes to produce and issue an estimate for repairs to a property to 4.5 days. Both State Farm and Allstate used drones in 2018 to respond to storm damages.
Chatbots Through Social Media
- Chatbots are used in insurance, but its use in property & casualty insurance is limited. Based on a survey, 45% of p&c companies have indicated that they are interested in chatbots, 25% have an ongoing pilot, and 13% currently use the technology.
- Chatbots are one way the property and casualty sector engages its customers. This technology works through messaging platforms such as WhatsApp, Facebook messenger, and other similar in-app chats.
- Chatbots can be used to help customers better understand "complicated service interactions" and guide them in choosing the policy that is right for them.
- They enhance the customer experience in areas such as claims validation and risk analysis, thus giving the customer access to human-like insurance professionals 24 hours of the week.
- Companies leading that charge are Allstate with ABIE, Progressive, and GEICO.
In researching the current and emerging trends heading into 2020, we reviewed articles from leaders and marketers in the industry. These articles were based on interviews done with market leaders in the property and casualty industry landscape. They were also from experts who have observed the trends in the industry and have prepared white papers and various types of content. For each trend, we ensured that there were no less than three experts or industry leaders that supported the arguments or findings. We then used examples that were specific to the property and casualty insurance segment of the industry.