Technology trends to watch in home and auto insurance in 2024

AI, telematics and more

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Bob Phillips

Personal Finance Writer

Bob Phillips is a personal finance writer whose expertise in insurance and investments has been developed through over fifteen years as an advisor/tr…

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Ross Martin

Insurance Writer

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  • 4+ years in the Insurance Industry

Ross joined The Zebra as a writer and researcher in 2019. He specializes in writing insurance content to help shoppers make informed decisions.

Ross h…

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Susan Meyer

Senior Editorial Manager

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  • Licensed Insurance Agent — Property and Casualty

Susan is a licensed insurance agent and has worked as a writer and editor for over 10 years across a number of industries. She has worked at The Zebr…

The landscape of insurance, particularly in the realms of home and auto, is undergoing a seismic shift thanks to technological advancements. In 2024, the property and casualty insurance industry is not just adapting to new technology — it’s being reinvented by it.

This year marks a significant turning point where technology is not merely a tool but a pivotal player in the insurance domain. As we examine each trend, we'll discover how they're not only creating efficiencies and cost savings for insurers but also offering more personalized and responsive services to customers. Buckle up, as we explore these compelling developments that are setting the stage for the future of home and auto insurance.

Artificial intelligence and machine learning

AI is one of the most talked about tech trends across industries in the past year. Artificial intelligence (AI) and machine learning (ML) are rapidly reshaping the insurance industry by enabling more data-driven decision-making. These technologies are particularly transformative in customizing insurance policies and streamlining claims processing.

  • Customized policies: AI and machine learning are enabling more personalized insurance policies. By analyzing vast amounts of data, insurers can offer premiums based on individual risk profiles rather than generic demographic categories. This means fairer pricing for consumers and more accurate risk assessment for insurers.
  • Claims Processing: AI is also revolutionizing claims processing. Chatbots and virtual assistants can handle initial claims reporting, while AI-driven assessment tools can quickly evaluate damages, speeding up the claims process dramatically.

Internet of things (IoT) and home insurance

The Internet of Things (IoT) is revolutionizing home insurance by integrating smart technology into everyday living spaces. These advancements offer insurers unprecedented insights into home safety and maintenance, potentially transforming how policies are crafted and claims are handled.

  • Smart homes: The rise of IoT has transformed average homes into "smart homes." Insurers are leveraging data from smart devices like security systems and smoke detectors to monitor risks in real-time. This shift isn't just about better risk assessment; it's about prevention. Customers who adopt these technologies might see reduced premiums, reflecting the lower risk profile of a well-monitored home.
  • Leak detection systems: Water damage is a major headache for homeowners and insurers alike. Smart leak detection systems can alert homeowners and insurers at the first sign of a leak, potentially saving thousands in water damage claims.

Augmented reality (AR) in insurance assessments

Augmented reality (AR) is making significant inroads into the insurance sector, notably in property and auto claims assessments. By overlaying digital information onto real-world environments, AR provides a more interactive and precise approach to evaluating damages and processing claims.

  • Enhanced damage evaluation: In auto insurance, AR can project digital overlays on damaged vehicles, allowing for a more detailed and accurate damage assessment. This technology not only improves the accuracy of claims but also streamlines the adjustment process.
  • Interactive claims process: For home insurance, AR enables homeowners to conduct self-assessments of property damage by guiding them through the process interactively. This not only expedites the claim resolution but also involves policyholders directly, improving their overall experience.

Telematics and auto insurance

For a while, telematics technology has been drastically altering the landscape of auto insurance, placing a greater emphasis on real-time driving data. This shift not only enables more personalized insurance models but also encourages safer driving habits among policyholders.

  • Usage-based insurance (UBI): Telematics, the integration of telecommunications and informatics, is a game-changer for auto insurance. UBI policies, where premiums are based on driving behavior monitored through in-car devices, are becoming increasingly popular. Safe drivers benefit from lower premiums, encouraging responsible driving.
  • Autonomous vehicles: As self-driving cars become more prevalent, insurers are grappling with new kinds of risks. The shift from driver liability to product (vehicle) liability will significantly alter auto insurance models. The big question for 2024 and beyond is how insurers will adapt to this paradigm shift.

Blockchain

Blockchain technology is beginning to carve out a significant niche in the insurance sector, primarily due to its potential in enhancing transparency and security. From combating fraud to facilitating innovative insurance models like Peer-to-Peer (P2P) insurance, blockchain stands as a pivotal technological advancement.

  • Fraud prevention: Blockchain's ability to provide transparent, immutable records is a potent tool against insurance fraud, a perennial issue in the industry. Smart contracts on blockchain can automate claims processing, reducing the potential for fraudulent claims.
  • Peer-to-Peer (P2P) insurance: Blockchain is also enabling P2P insurance models. These decentralized networks allow individuals to pool their resources and self-insure, potentially lowering costs and increasing efficiency.

Cybersecurity and Privacy Concerns

As the insurance industry increasingly integrates digital technologies, cybersecurity and privacy have become paramount concerns. Protecting sensitive customer data against breaches and ensuring compliance with evolving privacy laws are critical challenges insurers face.

  • Data protection and security: Insurers must employ robust cybersecurity measures to safeguard customer information from cyber threats and data breaches. This involves not just advanced security infrastructure, but also regular updates and employee training in data security protocols.
  • Regulatory compliance: With the growing emphasis on data privacy, insurance companies must stay abreast of and comply with international and local data protection regulations. This includes ensuring transparent data handling practices and maintaining the confidentiality of customer information.

The road ahead

As we look to the future, it's clear that the convergence of technology and insurance will continue to evolve. Insurers who embrace these technologies can expect not only to streamline operations but also to offer more competitive and customized products to their customers. However, with these advancements come new challenges and responsibilities which the insurance industry will need to address to ensure the security of its policyholders.

What this means for me

  • Keep an eye out for discounts from your home or auto insurer by utilizing technologies like telematics or home monitoring systems.
  • Ask questions about what data your insurance company is collecting and how they're keeping it secure.
  • Inquire about what tech solutions your insurance company might have that you aren't taking advantage of.