Manjit Rana discusses how innovations in technology translate into the world of insurance
In America you hand your tax return to your accountant, who scans your documents and electronically whisks it over to a team of people in India to start working on while you are sleeping. You place an order for three Big Macs, with extra large fries and a giant sized diet coke, but the voice taking your order is actually located miles away from the McDonalds that you are driving through.
The car you are driving knows how often you are breaking the speed limit, where you are driving and at what time. The cameras on the motorway are checking that your road tax is up to date while you shoot past them at 70mph.
You send your Toshiba laptop away to be repaired and it's collected repaired and returned back to you by UPS - all within 48 hours and without ever having touched the Toshiba offices. All these situations are real and happening today.
Technology is changing the way we live at a faster rate than ever before - so what might we expect from technology in our staid insurance world in the near future?
AXA and Norwich Union have already launched 'pay as you drive' type solutions for motor insurance where technology is used to track where the vehicle is at any time, how it is being driven and when.
The data is then transmitted back to base and premiums are dynamically calculated that more closely reflect the risk profile of the driver.
All new cars are now equipped with very sophisticated engine management systems that can gather massive amounts of data on the way the car is driven.
Combine that with the rapidly decreasing costs of satellite navigation systems and it may not be too long before we are looking for an insurance quote for every journey we are planning.
In reality we are more likely to see some insurers offering a base policy that covers the basic risk against theft and third party cover and other insurers offering cover for, say, long motorway journeys or local journeys around Nottingham - the premiums being consolidated and billed monthly to the driver.
Smart cards with finger print recognition instead of car keys could determine who is actually driving the vehicle. Car parking charges and fines could be automatically incorporated into the monthly bill too.
With road tax details and insurance policy details being registered centrally, how long before our car simply prevents us driving off unless we are taxed and insured to drive?
Already there are cities around the world where you can access the internet by wireless connection at broadband speeds wherever you are. And in the future, cars are going to be able to automatically access web-based services on the move.
Motor manufacturers are already deploying quite sophisticated technologies into their latest cars. BMW is already looking at installing internet access in the car to allow access to emails or automatically find and book the nearest hotel or restaurant at the planned destination.
Honda is just about to launch the first production model that can steer itself on motorways and keep a safe distance from the car in front.
RFiD (radio frequency ID) tags - the next generation bar codes for products - could be used to automatically create an asset register of all goods in your house, ensuring that your household insurer has an accurate picture of the value and type you own.
This may just start with high value electronic goods, but as the price of RFiD tags start to drop, which they will, even your can of baked beans will be tagged.
How long is it before we see consumers and businesses getting increasingly frustrated with supplying the same data to numerous sources in an attempt to obtain competitive quotes? Are we about to see a 'super broker' that scans the entire market?
I am not referring to the quote consolidators like confused.com that may obtain quotes from around 50 companies.
I'm referring to a service that turns the quote process on its head and the consumer gets quotes from a much broader range of quote providers. This would include the retail brands such as Tesco and Asda, the direct writers and the high street brokers. In short, quotes from several hundred providers.
How long is it before we see insurance being sold on eBay or through amazon.com?
For years, software providers have been trying to encourage brokers to go out to their commercial clients, laptop in hand, to make the data collation easier and to avoid the system of brokers handing scribbled notes to the internal team for them to enter on to the system before submitting to a number of insurers for quotes.
Let's face it - most of us don't like typing directly into a laptop when we are in front of a customer. If you are like me and type using just one finger on each hand we lose all credibility and surely we need to focus on the client rather than the laptop? Well even in this area, technology is overtaking us.
You can now use a digital pen to complete a paper application and by the time the last question has been answered the pen will transmit the data, via Bluetooth, to my mobile phone and onto either an insurer's extranet, the brokers back office system back at base or maybe into the Imarket portal.
If the insurers are able to turn the quotes around electronically the premium could even be sent as an SMS message to brokers' mobile phones before they've finished their cup of coffee at the client's office.
How about the claims process? How many televisions does a major insurer replace each year? Considering the volumes involved they are probably able to negotiate similar discounts to Dixons in the high street.
How about at point of claim allowing a consumer to log onto a claims portal, register the claim and using business rules driven software, give the consumer a choice of TV that they can replace their stolen one with.
In fact, why not let the consumer buy their next TV through the claims portal for a discounted price? Access to be restricted to current policy holders to increase brand loyalty and to try and stop the consumer switching to another supplier just to save £10. These claims portals could incorporate a whole range of goods and services.
There is no need to hold any stock as technology can now allow an insurer to create a virtual warehouse of goods and services which are actually held directly by the suppliers themselves with the data passing real time between organisations.
I read recently that a particular call centre has even done away with the receptionist and replaced her with an avatar - a computer animated image that can greet visitors and direct them to the right person or department.
No more waiting around while the receptionist finishes her conversation about the latest episode of Big Brother with her colleague before you get their attention then?
What about policy documents - considering the proportion of the population that is now on broadband why do we bother going to the expense of printing and posting policy documents out to our policyholders?
Wouldn't it be easier to store an electronic copy on a server and email a link to the policy documents for the consumer to access as and when they need them - a bit easier to access in the case of a flood claim too!
With all the money spent by insurers and brokers on creating quotes websites, how long before we see a quotes service on a mobile phone? But no one will have the patience to enter all the data via a mobile key-pad I hear you all scream - the issue is about data capture not about data entry.
My mobile is supplied by Orange. Orange has my bank details, my name and my postcode. If Orange passed my postcode to credit checking agency Experian it could find out the typical value of my house.
It could discover the number of bedrooms I have, the average value of the property on my street, the typical rebuild cost, whether my property is subject to subsidence, the value of the contents at my property too - and even details of my claims history via the CUE database.
The data could then be passed through to a quotes engine and the quote sent back to the mobile as a text message. The consumer so far hasn't had to key any data into his phone at all.
The technology for most of these scenarios already exists today. Chances are though, it's just not been applied in the right way to complete the jigsaw.
It will not be long before people and companies start to see the picture and the change the way that we transact and manage insurance - it's time we started thinking more creatively about our industry - before someone else comes along and eats our dinner.
' Manjit Rana is director of mortgage and general insurance solutions at Focus Business Solutions