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Bright Ideas in Risk

Four technology trends that can help prevent claims from happening in the first place

February 28, 2022 Photo

Risk management is an ever-changing field, and with the development of new technology every year, it continues to offer challenges and opportunities for growth. As we look ahead, it appears that 2022 will bring even more advances. Many trends have emerged over the past year or so, but the following four trends will have the greatest influence on the field as a whole.

#1: Insurtech will give way to risktech as companies begin curbing the amount of money they spend on technology that benefits underwriting activities, claims processing, and optimizing distribution channels.

The 21st century has seen the advent of many technologies for the insurance industry. These technologies range from improving the customer experience in claims to simplifying the underwriting process. While there continue to be innovations, the number is starting to plateau, which leaves room in the market for other tech to shine. In this case, the star of the show is risktech—the niche industry that helps both insurance companies and their customers prevent or mitigate risks. Yes, it is important to have insurance should the unthinkable happen, but it is even more important to prevent the unthinkable from happening in the first place. New technology allows for this.

#2: More insurers will jump on the risktech bandwagon and partner with firms to offer protection services. These services could help buyers lower their risks for vandalism, weather, and violence.

In 2022, organizations can greatly reduce their risk of potentially devastating water leaks or frozen pipes. They can work with their insurance companies to install sensors that detect water leaks or freezing temperatures and alert a staff member right away. These organizations can mitigate the problem before it causes further damage.

This type of sensor system is just one example of risktech that is turning out to be very useful for both insurers and buyers. Another example is wearables, which represent a maturing area of risktech. Employees wear devices that alert them if they are using improper lifting techniques or body posture. They can significantly reduce workers’ compensation claims and on-the-job injuries, which, in turn, increases productivity. They are particularly useful for jobs that require repetitive lifting or stretching, such as manufacturing or even jobs in health care facilities. Innovators on the leading edge are embedding such wearable devices into clothing so employees are less likely to accidentally remove them while they are on the job.

#3: Risktech will utilize advancements in computer vision and artificial intelligence to help mitigate risk.

While devices that sense water leaks cannot prevent the problem, they can help organizations catch it before it becomes especially costly. Another type of risktech, however, uses computer vision and artificial intelligence (AI) to minimize organizations’ risk for crime at their facilities and potentially prevent problems from occurring at all.

How is this possible? Programmers train computer systems to recognize certain signs of risk, such as:

•     A weapon in someone’s hand as they approach the facility, potentially signaling that the person intends to use the weapon to commit a crime.

•     Fuel cans and stacking combustible materials near a building, which could indicate a threat of arson.

•     Images of someone stacking bricks on a sidewalk. By itself, such an image may not raise an alarm, but if the organization has information about a scheduled march or protest in the area, that could help it take pre-emptive action to protect its building and people.

#4: Internet of Things devices will become more prevalent in the insurance industry as technology costs decline and 5G connectivity rises.

The days of dial-up internet are long behind us, and the convenience of 5G connectivity has inspired more organizations to use technology in all aspects of their businesses. Now, digital connection is part of our everyday life and there is an Internet of Things (IoT) just waiting to be explored. As these devices become more widespread, the costs decrease, making them a smart option for insurers.

While technology has, of course, been rapidly accelerating for many years, the pandemic has lit an even bigger fire under companies. In 2022, we will see this begin to take hold in the insurance and risk management field. This will lead to a growing wave of adoption that will ultimately serve to inspire even greater innovation and refinement. While this is good news for insurers, the ultimate beneficiaries are policyholders themselves.

About The Authors
Guy Russ

Guy Russ is assistant vice president – risk control for Church Mutual Insurance Company, S.I. 

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