Why Insurance Will Become Invisible

You might want to take a mental snapshot of what insurance looks like, because children born today could make up the first generation that won’t know what insurance is. That’s not because insurance won’t be a thing; it will just look a lot different in 20 years. “Insurance will be much bigger, and there will probably be more — because there will be many more risks,” said SAP Global Head of Insurance Bob Cummings on Thursday during his keynote at the SAP Digital Insurance Innovation Summit near San Francisco. Cummings realized this as he imagined how much technology would change by the time his niece’s newborn daughter, Aliénor, reaches the age of 21. By then, Cummings predicts vendors might only sell insurance when it’s packaged together with other services. Bundle Up for Protection ADT Security Services and insurance provider State Farm have already paired up to safeguard customers against burglary, flooding, fire and more. The same protection package is available from each company’s website, with a single app to control it all. And more technological improvements for Aliénor and her cohorts are sure to follow over the next two decades. “The company at that time will probably tell her, ‘We’re so convinced of our burglary protection that, if you do get burgled and we don’t manage to stop the burglar, we’ll pay you up to $200,000,’” Cummings said. “And the RFID tags and batteries will be so advanced that there will even be theft protection for where her things go.” See also: Not Your Father’s Insurance Industry   Customers of the new insurance company Tr­­­ōv can already protect their valuables by turning coverage on and off of individual items whenever they like via their mobile device, as demonstrated in a video Cummings shared during his keynote. Users can also file loss or damage claims simply by answering a few questions on the mobile app. Staying a Step Ahead This kind of industry fluidity, in which different organizations join forces to offer something greater than the sum of their parts, also happens right now with data. Applications currently available to insurance companies can combine historic customer data with real-time insights, such as a person's online searches for a car or home. “This is all very relevant, very time-critical information because, by the time he actually contacts us, he will have done a lot of comparisons,” said SAP’s Roland Bloesch at the summit Thursday. “And if we can engage with the customer before that — earlier in the customer journey — we will be able to talk about the price and value-added services.” This bundling of different data is also critical for predictive analytics, which can forecast the customer’s next priorities, according to Bloesch, SAP’s insurance customer engagement head. Brokers, agents and advisers can use that information for active outreach instead of just waiting for the customer to call. Digital Picture of Health Aliénor and her cohorts will probably travel more than young 20-somethings today, Cummings predicted. And travel guidebook publisher Lonely Planet is already trying to make travel safer and easier for them by digitizing its vast repository. See also: 8 Things to Know About Insurance   “They see a world where you’re walking around in Vietnam, and they say, ‘Turn left over here because there’s a cool temple,’” Cummings said of Lonely Planet’s efforts. “And they’re already including insurance.” Beyond helping Aliénor and her friends safely see the world, new insurance products could also help them mitigate risks to their wealth and business — and even their health, according to Cummings. Biotechnology company Livongo and the Vitality wellness program use high-tech to offer consumer-style experiences in healthcare, providing feedback, encouragement and incentives to people who keep their fitness up and health insurance costs down. A Picture Will Last Longer “A lot of those models are already emerging,” Cummings said. “I don’t think we have to wait until Aliénor is 21 years old to start imagining these kinds of things.” So make that mental note of what insurance looks like today. Because it might not look that way for much longer. This story originally appeared on the SAP Community.