Why the Lack of Innovation in the Insurance Industry?
For years, the insurance industry and the home warranty industry lacked innovation. However, recent trends indicate that change is now upon us. Customers, insurers, and brokers are benefiting from many recent technological upgrades and the Internet of things. For example, the insurance sector is benefiting immensely from the interconnectivity of devices, including telematics, interconnected online home devices, smartphones, smart kettles, smart vacuum cleaners, and the like. With the focus shifting away from repair and replacement to the prevention of damage, loss and theft, insurance industries are seeing positive changes with the IoT.
Innovation is Coming, but can Newbies Keep Pace?
One of the biggest changes to impact multiple industries across the board is blockchain technology. The FCA (Financial Conduct Authority) has indicated that blockchain - the information network which cryptocurrencies operate on - can create shared information on a decentralized network, no intermediation necessary. With a near 0% probability of cyber security threats, blockchain technology is leading the way with the insurance industry.
By removing third-party intervention, eliminating paperwork and bureaucracy, blockchain technology is one of the most powerful innovative forces in the insurance industry. Technology and the advancements it brings is evident in unmanned aerial aircraft i.e. drones which can now fly over devastated areas and assess damage for insurance-adjustments, claims, and assessments. When human personnel are unable to enter a damaged or ravaged area, aerial reconnaissance and assessments make it possible to perform optimal insurance-related functions.
AI a.k.a. artificial intelligence is the technology of the future, and it's available now. This computer learning system uses analytics, logarithmic functions and 'deductive reasoning' capacity to analyze claims, process them and create more efficient transmission mechanisms. With claims being processed in mere seconds, AI technology is slowly being to fast-track the everyday activities on policyholders' accounts.
The insurance industry is always aiming for greater efficiency of operations. The marketplace is rife with competition, and any competitive edge can mean the difference between success or failure for these conglomerates. Today, the world is still dominated by large-scale juggernauts, but change is evident in the FinTech arena where smaller companies are now competing with the giants through specialized services.
Who Rules the Old Boys Club of Insurance and Home Warranty Coverage?
The impact of innovation on insurance and home warranty industries is already evident in the number of companies that have set up shop outside of the 'Old Boys Club.' Rampant innovation has been a hallmark of FinTech technology where localized home warranty companies can offer their services to customers in specific cities, counties, states or geographic regions. There are many benefits to picking local operators over national operators.
For example, weather phenomena, trends, market variables, and customer preferences are not evenly dispersed across the country. Certain regions may benefit from a personalized approach to offering home warranty coverage, and insurance options. For example, states which have a well-developed solar industry will do better with local companies that make accommodation for solar panel systems in the overall home warranty coverage.
This is not to say that the giants of the industry should be avoided at all costs. Companies like American Home Shield has been operating an economy of scale for several years, allowing it to become one of the most efficient home warranty coverage companies in the market. As with all home warranty coverage, it's important to get an objective evaluation of the services offered by the company.
Independent analysis of home warranty companies should be conducted through impartial reviews such as different American Home Shield plan reviews. AHS offers widespread coverage for appliances and systems, with several plan options and wide-ranging pricing. In other words, there are plans tailored to every budget, depending on the coverage that you select. Naturally, there are plenty of big-name operators in the market, with the lion's share of home warranty coverage being dominated by these companies.
Leading by Example: The Lion's Share of the Market
It is clear that innovation, and technology will streamline the insurance industry, and the home warranty industry in a big way. Online technology is cutting costs, creating greater efficiency of operations. Companies like American Home Shield dominate the market, generating over $1 billion in revenue back in 2016. The entire industry is only worth $2 billion per year. There is no good reason why a company dominates the market and others find it difficult to get in - it's usually an eclectic combination of reasons such as brand power, service excellence, innovation, and the ability to outmuscle the competition before they even get a foothold. Provided companies like American Home Shield (AHS) continue to lead from the front, they will remain dominant forces in the market.