The TowerGroup report, titled "The Digital Chauffeur: Real-World Principles of Innovation for the Insurance Industry," addresses the technology shifts that will drive massive industry changes affecting both insurance carriers and technology vendors.
The potential impact of innovation on the insurance industry extends far beyond the use of faster computers and a browser-based customer experience. TowerGroup believes six principles will drive the insurance industry toward innovation over the next decade: changing the user interface; capturing contextual data; using technology from adjacent industries; collaborating with users; making infrastructure agile; and managing risk dynamically.
For example, event data recorder technology used by manufacturers to improve the performance of air bags will see increased use by claims organizations to correctly assign fault in accidents and prevent fraud. By 2012, global positioning system technology will provide huge volumes of data that insurers can use to improve pricing accuracy, even opening the door to create dynamic pricing that varies with location risk.
This transformation will be fueled by increased investment in technology infrastructures, with spending on IT development projects by the global insurance industry rising from $1 billion (USD) in 2006 to $1.25 billion by 2010.
About TowerGroup
TowerGroup is the leading research and advisory services firm focused exclusively on the financial services industry. A respected source for trusted information and advice, TowerGroup brings many of the world's leading financial institutions, technology companies, and professional services firms a deeper understanding of the business and technology issues impacting their organizations. Headquartered near Boston in Needham, Massachusetts, and with offices in North America and Europe, TowerGroup serves a global client base.