What does the future of insurance look like?
It can often feel like we're already living in the future in modern Australia. Every week seems to have some new technological innovation in store for us – whether that's consumer electronics, vehicles or even medical advances.
This is one of the reasons why "digital disruption" has become a buzzword of almost every industry across Australia. Everyone is being affected by the new products and services coming onto the market – insurers included. While many of these technologies are still in their infancy, let's take a look at what your insurance might look like in the future.
The rise of the digital marketplace and the ease of access to information has already changed the way we buy cars, but it could also change the way we are insured as well. Improvements in design and safety have helped to dramatically reduce the fatality rate of crashes in modern cars, according to the American Institute for Highway Safety, but what if we could avoid those crashes altogether?
Autonomous vehicles offer that opportunity: Many crashes nowadays are the cause of human error (most notoriously inebriation) – but with autonomous cars, the human factor would be eliminated entirely. And your insurance would reflect that.
Your good (or bad!) driving behaviour could end up affecting your premium more than you'd think.
In the age of Big Data, there is more information available about the average consumer than ever before. Much like how your credit report affects what your mortgage lender is able to offer you, insurers will be able to access more data in order to provide a more suitable product.
Risk-based pricing already has a place in insurance, the difference here would be what information is available, and how accurate it is. Considering that more and more cars are becoming connected within the realm of the Internet of Things, for example, your good (or bad!) driving behaviour could end up affecting your premium more than you'd think.
Medical innovations are making it possible for Australians to live longer every year. According to the 2015 Intergenerational Report from the Treasury, the average Australian is expected to live up to 95 years old by 2055, with 40,000 people living to over 100 years old.
This will affect your life insurance as insurers have to adapt to the increased life expectancy and subsequent higher chance of medical intervention as there are more older Australians, possibly in need of more disability services (and greater income protection standards).
Self-driving cars, big data, longer lives: It's an exciting time to be alive in Australia! If you'd like to plan for the future, make sure you get in touch with one of the financial planning experts here at Eclipse and seize not just today, but tomorrow too!