2018: The Year Ahead for Claims and Technology Innovation

As 2018 gets underway, now is time to reflect on the trends that have shaped the insurance sector over the past 12 months and look into our crystal ball to make predictions for the year ahead. Technological innovation is transforming insurance and its claims team processes. I predict this trend will gather speed in the coming year, driving senior insurance leaders to increase resources that will be directed at the exploration of how technology can complement and grow the insurance sector and its claims processes.  

With that in mind my predictions for 2018 are as follows:

Artificial Intelligence

No surprise, this one. Attending numerous insurance market events last year demonstrated to me that there is a clear appetite for investing in artificial intelligence (AI) based solutions. This appetite will only continue to grow in 2018 as insurance carriers seek improved customer experience in the sector. Other sectors have invested in chatbot technology over the last ten years and this is transforming the customer experience in a range of industries. It seems pretty clear these digital agents and their more sophisticated digital descendants will continue to gain favour in insurance circles by developing messaging apps that facilitate low-level enquiries, for example, calculating claims and perhaps marketing insurance.

What will be interesting to observe is whether increased human collaboration with A.I. will follow. Will good old flesh and blood human agents be able to adjust to this new environment and become familiar working alongside chatbots, A.I. and other new sophisticated technology disrupters therefore increasing efficiency and productivity in the London insurance market and further afield?

Internet of Things

Approximately 6.4 billion devices are now connected to the Internet of Things (IoT) according to 2016 statistics. In 2017, it is reported that figure grew to 8.4 billion. This trend looks set to continue at a rapid pace in 2018. What seems equally certain is that we can also expect to see IoT create huge opportunities for insurance carriers. When we collect data and analyse it through IoT technology I believe that it can help to foster better understanding of customers’ risk profiles, help to deliver smarter marketing, deliver accurate pricing, and drive smart claims management, which can only transform the way our clients do business with their policyholders.

Cyber security

Cybercrime is becoming more sophisticated, which is intensifying the need for more robust security measures that are embedded in the fabric of an organisation. Cyber risks will continue to be at the forefront of insurance company concerns in 2018. Industry surveys seem to indicate that the insurance sector lags behind other financial services sectors, such as banks, when it comes to investment that counters the growing cyber risk.

That feeling is born out when you consider that International business auditing firm KPMG reports that according to a recent study, only 20% of insurance CEOs believe that their firm is prepared for a cyber security event. 42% realize that cyber security is their most serious concern – outweighing regulatory risk by a significant margin.

The volume of cyber attacks is increasing (last year’s WannaCry ransomware attack, for example, affected more than 200,000 systems across different sectors globally); so insurance firms will very likely prioritise cyber preparedness this year.  The risk of not mitigating this threat could simply be catastrophic, particularly, as insurance companies retain vast amounts of personal data on individuals. 

Distributed Ledger Technology (DLT)

Blockchain came of age as a concept and then became reality in 2017 with the launch of B3i, the Blockchain Insurance Industry Initiative. B3i announced the launch of market beta testing of its reinsurance blockchain prototype. The group of fifteen global insurers and reinsurers participating in the first phase of B3i initiative has been working on a joint distributed ledger for reinsurance transactions driven by blockchain technology. The group for the first time publically showcased a fully functional beta-version of its integrated blockchain solution for the re/insurance industry at the 61st Monte Carlo RVS conference.

Blockchain’s supporters claim that it will revolutionise financial services while critics counter the technology is not mature enough for large-scale application. The critics have their doubt that the technology is as reliable as we are being told. When considering the threats to blockchain, businesses tend to focus on the dangers of increased regulation, which makes sense. There might be a bigger threat on the horizon, however. The lure of Blockchain is its security benefits while the technology also allows a ledger of transactions to be distributed between a large network of computers. No single user can hack into or change the ledger, in theory.

This is where quantum computing comes in. Quantum computing relies on quantum physics and has more potential power than any traditional form of computing. Quantum computing continues to progress rapidly and at some point it may even come to pose an existential threat to public key cryptography, so the blockchain technology upon which is relies may be vulnerable to hacking.

Whatever the reality, blockchain has captured the interest of many in insurance over the last year. In 2018, expect to see the insurance market start to evolve from the proof of concept stage to live uses of blockchain, particularly in terms of simplifying underwriting and perhaps even providing greater transparency to the claims process.


A recent OBR report released in the UK highlighted the issue of low productivity. 2018 will provide an opportunity to assess this challenge, particularly as Brexit looms. The growing need to prepare for Brexit allied with the imminent decline in the imported labour on which UK Plc. relies could incentivise swifter adoption of insurance and claims technology automation. One point of view is that it will result in investment in new technologies, providing an opportunity to bolster the City’s position as a technology hub. Might that lead to more investment in an area with growing potential: Insurtech?  Quite possibly. 64% of the 25 largest insurance companies globally have funded new Insurtech, and that figure is set to rise to 80% in 2018 so watch this space.