There is some remarkable innovation going on in the homeowners insurance industry, and it’s only just begun. Everything around us is changing – the business, employees, customers, and systems. The technology tidal wave may be moments away from reaching the shores of the insurance industry.
In 2014, we continued to swap the outdated for the new and more innovative. We began replacing humans with drones and cars with the Uber application. We do not need hotels anymore after Airbnb. Who needs gas when you can buy a Tesla? We can replace tablets with the iPhone 6 and 6+. Why pay for a “physical” when you can monitor your health with FitBit? Forget your wallet? No problem, you don’t need it anymore if you have Apple Pay. If you have a bad memory, you won’t miss a thing with a GoPro or Google Glass. What a year!
The disruptive forces are coming from everywhere, and they will continue to reshape every piece of the homeowners insurance industry in 2015. Following an exciting 2014 in innovation, it’s time to turn our focus to 2015. Let’s take a look at the four insurance claim innovations to watch out for in 2015.
Innovative Employees: Disruptive Forces Overpower Legacies and Politics
The most important thing to watch for is the innovative employee in the homeowners insurance industry. The biggest innovations mentioned in the introduction were born within the walls of an existing company. The best technology advancement in the world cannot solve any problems without innovative employees who will ensure client and customer adoption. In 2015, innovative employees at homeowners insurance companies will continue the trend of disrupting current systems in the face of legacy systems and company politics. It’s not just “okay” to challenge the company status quo. Rather, it’s celebrated. How long will it be until an innovative field adjuster scopes a loss with Google Glass and issues coverage using Google Pay? No one can be sure, but it’s likely right around the corner and will have lasting effects on customer experience.
Innovative Insurers: the Big Insurers are Getting Bigger
Innovative companies like Progressive Casualty Insurance Company use their financial resources to eliminate competition from weaker insurers, and they are headed for the homeowners insurance industry. The large automobile insurers have rapidly increased their homeowners insurance business. These companies changed the automobile insurance industry, and they are about to do the same to the homeowners insurance industry. As the market consolidates to reveal more power players, these colossal insurers will continue to innovate to grow their book of business and reduce competition. “Connected homes” are coming sooner than you may think. How long will it be until Progressive places a black box in each home to detect a water leak before it causes any damage? In 2015, innovative insurers will use their powers take an increasingly bigger share of the national homeowners insurance market.
Innovative Techniques: Introducing the Drone Field Adjusters
The third important thing to watch for is the drone field adjuster. If IBM’s Watson can defeat the best Jeopardy contestants, it is only a matter of time until insurers can program drones to conduct portions of the claims adjustment process. The technology is available, however, the industry is still years away from being able to confidently replace skilled field adjusters. Nevertheless, the industry will make significant strides in 2015 towards automating the adjusting process. Innovative people at innovative insurance companies are already making drones a priority, and it is only a matter of time until drones can hover over 1,000 hurricane-damaged roofs in one day to initiate the claim payment process.
Innovative Customers and Partners: Generation Y is Starting the Takeover
The fifth and final innovation is right in front of insurers: their current and future Generation Y customers and business partners. Each year, homeowners insurers’ traditional customers and partners look less and less like they used to. In their place, Generation Y members become a bigger part of insurers’ customers and business partners. Generation Y homeowners have an entirely different set of expectations, including immediate responses via social media; usage-based premiums for more customer-based products (for example, Progressive’s Snapshot); and rewards for being a good customer.
By the end of 2015, wearable technology may be able to document whether a homeowner turns off her water main before leaving for vacation. Shouldn’t she be rewarded if she takes a “selfie” next to her water valve showing she prevented a potentially disastrous water loss? She’s surely going to tweet about it if she isn’t rewarded. #insurancefail. Even more, with the developments of Uber and Airbnb, customers may never have to pay for insurance again! That’s a scary thought. Ultimately, insurers need to pay close attention to the needs of their fastest growing customer base.
Homeowners insurers must also remember that their Generation Y partners – third party adjusters, contractors, and agents – will continue to grow in 2015. They will want to partner with companies that reflect their “reality,” including innovating, taking risks, and communicating with clients in the digital world. Insurers’ third party agents may be able to convert more leads if they use WhatsApp or Twitter instead of traditional voice calls. Homeowners may use Snapchat to schedule a field adjuster inspection. As the demographics shift, more of insurers’ third party partners are savvy with this technology. If insurers’ Generation Y partners use Apple Pay to process payments without any human cost, then insurers should too. If insurers’ third party adjusters know how to use a GoPro to record their epic surf trip in the highest quality digital format, they can use that same breakthrough technology to document the proper coverage decision.
Generation Y is the “new normal” for homeowners insurers. If insurers fail to meet Generation Y’s expectations, homeowners and partners are one click away from damaging insurers’ reputations, and one more click away from choosing a different insurer.
This article was previously published in Claims Journal’s Windstorm magazine.