There will be entirely new policies such as 'just-in-time' insurance, where each step of a journey, such as car-to-train station, train-to-city, station-to-office, will be risk-rated separately. Policyholders will trade location and time of day privacy data for lower insurance bills and there will be real-time calculation of risks and a running premium tally.
Insurers will also pursue active risk management to reduce claims and costs by emphasising preventative actions. Policyholders could be relayed convenient information; for example, advice to avoid an overloaded road.
The study, based on interviews with global insurance industry executives, forecasts a need for growing innovation as technology lowers barriers to entry, leads to growing numbers of niche players and creates more active, informed consumers who will demand more and who will reward non-traditional operators.
Insurance 2020: innovating beyond old models
IBM Institute for Business Value, 22 May 2006
Review by Steve Lodge