New technologies and insurance

Insurance companies, especially those eager to innovate, are also taking the digital turn. They are increasingly investing in technology and introducing cutting-edge solutions into their production chains: standardization of certain tasks, automation of practices, optimization of damage appraisal and assessment, etc.

Insurtechs [4] are at the heart of this revolution, with start-ups flourishing all over the world and relying on new technologies to offer innovative insurance models and products.

According to Grand View Research, the size of the global insurtech market is estimated at 7.78 billion USD in 2023. It is poised to reach 152.43 billion USD in 2028, accounting for an average annual growth estimated at 310%.

Technological breakthroughs adopted by the insurtech market pertain mainly to:

• The Internet of Things
• Artificial intelligence and machine learning
• Augmented reality
• Cloud computing
• Drones
• Blockchain
• ChatGPT
• Social networks

L’assurance et l’internet des objets

The Internet of Things (IoT) refers to all internet-connected devices capable of providing accurate real-time information on user behavior. With the exponential multiplication of connected objects, the global IoT market has become immense, offering a multitude of new applications that are revolutionizing usage and impacting the daily lives of individuals and businesses.

Various sectors are now being attracted to innovative IoT services, including industry, transport, energy, etc. The American research firm IoT Analytics estimates that there will be 14.4 billion connected objects worldwide by 2022.

In the realm of insurance, the IoT enriches existing predictive analysis models through the introduction of intelligently collected and analyzed fresh data. It is also capable of rapidly deducing the probability of an event occurring.

Insurers' investments in IoT solutions are booming and are poised to grow by an average of almost 10% a year up to 2026.

In motor insurance, connected objects and integrated telematics devices facilitate the process of collecting data on the motorist's driving behavior, which can be used to optimize risk assessment and determine rates and premiums based on the driver's driving conduct.

Artificial intelligence at the service of insurers

The term Artificial Intelligence (AI), often used to designate Machine Learning, refers to a machine's ability to learn concepts autonomously, enabling it to perform certain human tasks thanks to algorithms fed by a large mass of data.

Artificial intelligence technology could revolutionize the insurance industry through:

• improved administrative management,
• automation of underwriting procedures,
• more accurate risk prediction models,
• optimized customer relations and more relevant targeting of insurance products,
• reduction of claims processing times,
• fraud detection.

Policyholders, too, can take advantage of AI applications to report a claim in real time and request compensation, without even any recourse to the assistance of an adjuster.

According to Data Bridge Market Research, revenues from AI solutions in the insurance market are estimated at 3.64 billion USD in 2022 and expected to rise to 35.77 billion USD by 2030, accounting for an average annual growth rate of almost 100%.

Insurance and augmented reality

Augmented or virtual reality is a technology that enables real-time integration of 3D virtual elements within a real environment. This technology is currently witnessing considerable growth, mainly in the luxury goods, tourism and retail industries.

In insurance, the immersive experience of this technology enables claims to be simulated and damage to be estimated. Better risk mapping can be undertaken thanks to the development of scenarios that are more or less consistent with reality and with risk environment.

In the near future, augmented reality could become a risk prevention tool. According to a report by Morder Intelligence, the augmented reality market, currently estimated at 1.98 billion USD, is poised to grow by 151.93% between now and 2026.

Contribution of cloud computing to the insurance sector

Cloud computing is the use of IT infrastructures to store, manage and process data. It is a way of organizing information systems (IS) based on the dematerialization and outsourcing of IT resource management to a service provider.

The use of the Cloud has become a key element in the digital transformation process of companies, including insurance companies. This storage system was massively adopted during the Covid-19 crisis. It is designed to better secure data, reduce costs and implement an IT infrastructure suited to teleworking.

The use of the Cloud has become a key element in the digital transformation process of companies, including insurance companies. This storage system was massively adopted during the Covid-19 crisis. It is designed to better secure data, reduce costs and implement an IT infrastructure suited to teleworking.

Use of drones by insurance companies

Drones are unmanned aerial vehicles that fly automatically or by remote control.

In the insurance industry, drones are used to identify and assess, more accurately and exhaustively, the damage caused by natural or technical disasters (explosion, fire, hurricane, storm, etc.) occurring in inaccessible geographical areas.

The booming drone market is currently estimated at 5 billion USD, compared with 1.8 billion USD in 2015. According to current projections, the overall value of this market is expected to reach over 63 billion USD by 2028.

Blockchain and insurance

Blockchain is a technology for storing and transmitting data without a central control body. The blockchain market is booming and is expected to grow by 57% by 2026.

In practice, this system enables information to be stored transparently and securely. This technology also makes it easier to verify and share data, reducing the costs and time involved in repetitive operations. The risks of fraud or piracy would, therefore become minimal.

Blockchain can be used in insurance [7] to simplify the underwriting, assessment and claims handling procedures, thus optimizing customer experience.

ChatGPT: a tool that is attracting the interest of insurers

ChatGPT is a conversational agent using artificial intelligence to chat, answer questions, create text or computer code.

The launch of ChatGPT at the end of 2022 has caused quite a stir. The robot, which uses generative AI and NLG (Natural language Generation) technologies, offers significant advantages for insurance companies in terms of customer support, predictive modeling, risk analysis and product adaptation to market needs.

ChatGPT can answer a wide range of queries, from the most basic to the most complex ones, enabling insurance companies to provide a more personalized customer service.

The technology also supports the automation of tasks such as policy underwriting and the claims handling process, which should reduce operational costs and speed up claims settlement times.

Social networks to revolutionize the insurer-insured relationship

Omnipresent in everyday life, social networks, dominated by the American net giants (Facebook, YouTube, WhatsApp, Instagram, LinkedIn, ...) are witnessing the birth of a new Chinese player, TikTok with 1.7 billion users in 2022.

According to a report published at the end of 2022 by Hootsuit, a social network management tool, and We are Social, a communications consultancy agency, 5.48 billion of the planet's inhabitants are Internet users, including 4.74 billion active users of social networks, that is, 86% of Internet users and 59.3% of the world's population.

Social platforms have profoundly revolutionized the insurer-insured relationship. The power of the algorithms used has enabled insurance companies to target a much wider audience, whose data is collected and analyzed for better personalization of the insurance offer. Social networks also enable greater interaction with customers in real time.

Consequently, insurers are provided with new channels for communicating and marketing their offers, such as targeted advertising campaigns. Furthermore, it's a mass-market way of introducing a brand, creating proximity and presenting products to an ultra-connected generation of consumers.

Digitization: what are the stakes?

Despite the growing importance of digital strategies and technological innovation in the insurance industry's value chain, excessive digitization raises a number of concerns pertaining to:

• the use of personal data: the boundaries between privacy and the public sphere are being blurred,
• competitiveness: insurance companies that have invested heavily in innovation are taking full advantage of cutting-edge technologies, creating an ever-widening competitive gap with those who do not have access to them,
• the difficulty of managing customer relations for certain players,
• securing company data,
• disclosure of information and leakage of sensitive data,
• operational optimization,
• the shortage of qualified personnel to support digital transformation within companies,
• reasoning errors: Some technologies should be used with caution, as the solutions proposed are not always totally reliable,
• concerns about the pace of development of artificial intelligence.