Technology will drive insurance sector success: Study

The U.S. property/casualty sector is under pressure and its future largely depends on the strategic use of technology, according to a study issued by Ernst & Young L.L.P. on Wednesday.

The New York-based financial services firm’s “2017: A Time for Reassessment” notes that the property/casualty sector is facing shrinking investment income, escalating claims costs and increased regulation while advances in technology are raising customer expectations for greater innovation and revising traditional property/casualty models.

The report said that development such as the internet of things, telematics, artificial intelligence, driverless cars, and blockchain -- a secured online transaction technology -- have the potential to transform industry fundamentals and even redefine risk.

“In the future competing for market share will be increasingly dependent on technology, data and analytics,” the study said.

Considering the vast amount of data insurance firms maintain, insurers should make cybersecurity a top priority, the study said. Insurance and other financial services institutions are likely to see further cybersecurity regulations as it has gained more attention as a national security issue.

The report also said that 2017 should be the year insurers close the talent gap, noting that 70,000 people are expected to retire from the insurance industry next year.  Companies will look for specialized skills in the latest technology as well, such as artificial intelligence and social media, along with such areas as digital sales, risk modeling, and big data analytics.

“Tighter immigration policies and changing attitudes under a Trump presidency could tighten the talent pool,” the study said.