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Will our financial sector future look like this?


The future landscape; will the future look like this beautiful picture I took while hiking in Aguirre, Costa Rica?

Anyone that reads any insurance and/or fraud industry publication is aware of the fact that there is an insurmountable number of areas that the insurance industry can head into, but, we can be sure of one thing, the industry will not be the same as it is today as technology will force us to adapt and modify our current insurance process. In this blog, I will address some of the most significant issues, strategies, and developments that I see across the many areas that I operate in and highlight the top areas that we need to keep an eye on in the year to come.



• The paper world will disappear. We are moving in a direction where the entire insurance industry will be paperless, that is policies, claim forms, medical bills, and any other paper document as we know it will be replaced with an electronic version. Even forms that may still be paper based will be scanned and transferred into an e-version. Policies will be taken out by insureds via app (which is currently being used by many carriers), but this will become the norm in the near future. In addition, policy modifications and renewals will all be handled in an electronic version. This transition from paper to e-version will require carriers to modify their current workflow and develop systems to support these new approaches.



• Risk assessment will be entirely transformed. Traditional methods of risk scoring and assessment for policyholders will still be used, but technology will help to make this more focused and accurate. There will be a trend in the use of behavioral factors to further customize premiums and policy offerings. Carriers will use apps to track driver behavior and assess safety metrics. Vehicle telematics will be used to determine how safe a driver is by real time tracking of how a policyholder drives—too fast, too slow, at night, in metropolitan ares etc…Furthermore, ponder how companies could use this connection to their advantage and warn a policyholder if they were about to drive into an intersection that had several recent accidents, or a policyholder that was jogging was about to run down a street where several prior dog bites occurred. These scenarios seem far-fetched, but I guarantee you, these will surface.



• There will be increased resources needed for carrier legal departments. With all of the new and uncharted areas of technology, social media, Iot, and machine learning, legal departments will be challenged with how to approach claims and litigated cases that involve these new issues. Ponder how a self-driving vehicle that causes an accident will cause increased challenges for insurance legal departments as they sort out these cases without robust precedence to rely on.



• Property damage exposures may increase. There is no doubt that technology is making cars safer, with beeping backup systems, cameras, and many other technologies, drivers are being surrounded by tools that make driving safer. However, the new vehicles with these enhancements will cost more to replace and repair, thus driving the cost of appraisals and property damage loss exposure.



The list could extend for another hundred pages, but these I feel are the most significant areas for carriers to focus on as our industry goes through a rapid transformation.



Stay safe!


Dr. Fraud

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