The world has come a long way from the era of dial up internet connections that offered humble data transfer speeds to today’s omni present high-speed internet connections and soon we will be catapulted onto the information superhighways at breakneck speed, enabled by 5G Services. With service provider across the globe rushing to upgrade their networks with the latest technology has to offer, the world stands to change as we know it.
The enhancements that 5G networks offers over its predecessor can be bucketed largely across Capacity, Latency and Connectivity. 5G is slated to offer data carrying capacity up to a thousand times more than 4G, it facilitates connections with several hundred devices all at the same time and promises five times lower latency. These improvements hold the potential to completely transform business operations or unveil new product offerings across industries.
Impact on insurance value chain
In this point of view, we walk through the Insurance value chain and hypothesize the potential for the Insurance Industry along the way, with focus on Advisor Interactions.
The first phase in the Insurance Value Chain, namely the Prospecting phase is generally facilitated by a phone call, an email followed by a standard one-size-fits-all prospectus offering very little personalization or opportunity to visually interact with the Insured itself. From purely a customer experience perspective, this can be significantly enhanced and made more engaging leveraging 5G as 5G network can provide these customer-advisor interactions over high definition real time video channels. If we really stretch the envelope we can also talk about more life-like interactions using holographic techniques, all enabled by 5G networks. Additionally, there is an opportunity to improve the illustration of data in terms of how its presented to the end customer. Interactive modules can help simulate various outcome given different scenarios and help customers decide appropriate coverages considering a variety of risks and their impact. Accordingly, these changes arising from the interactive simulations can quickly be refactored to provide revised quotes, thus reducing the overall TAT and improving customer experience.
The next phase which is Submission and Underwriting phase involves comprehensive questionnaires, additional telephonic interviews, medical examination followed by risk review and classification. While 5G won’t take away much of what is involved, it presents an opportunity to make the processes more seamless for the customer and more efficient for the carrier. For instance, a 5G enabled ecosystem with participation from the credit bureaus, DMVs and other local agencies can seamlessly provide much of the information otherwise obtained via the questionnaires. This coupled with the use of mobile phones and hand-held devices to collate, process and analyze the data would aid in the underwriting process. 5G is likely to also pave the way for more virtual interaction for medical/non-medical assessments, eventually alleviating the need for physical examination where possible.
The redundancy of desktops and automation of operational tasks could ultimately facilitate issuance of insurance policies in real-time, significantly reducing the time lag between quote acceptance, underwriting and issuance. The seamless interaction with the end customer would perhaps spill over even in the policy servicing space. 5G could enhance the user satisfaction by reducing the time taken for claims settlements and this would largely be driven by faster access to data points coupled with Artificial Intelligence and Data Analytics.
Broader impact on the insurance industry
While there would be some direct implications of 5G for the Insurance industry, the latter also stands to be impacted due to 5G led transformation in other industries. For example, consider the impact of 5G enablement to the auto industry. Connected cars that exchange sensory data in real-time with each other would greatly reduce road accidents and make it generally safer to drive cars. Car thefts could be greatly reduced as other cars would detect a stolen vehicle and instantly report to the authorities. Automated vehicles could reduce or completely eliminate the need for human intervention and thereby shift the liability away from the driver completely. Are the customers then expected to still pay the same premiums for considerably lower risks or could it be that these advancements circumvent the need for auto insurance altogether?
Another example would be in the cyber security space. With Internet of Things (IoT) slated to be the biggest beneficiary of advancements to 5G, we expect billions and billions of IoT devices to be connected to the internet over the next decade. While these devices do provide us with tremendous amount of sensory data, they also leave us exposed to attacks by malicious actors. Will some players in the Insurance space lead the charge and offer innovative products to help secure organizations and their customers’ interest against cyberattacks on such vast and exposed networks?
5G technology unleashes the potential for industries to not only transform their business operations but also identify new products and offerings. There is clearly a whitespace in the market for such offerings and the pioneering enterprises that take the first step could be favorably rewarded.
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