All areas of the insurance industry are rising in cost. In this digitally driven world, no one is safe from cyberattacks like ransomware. This means that the price of protection – cyber-insurance premiums – come at a steep cost. Oppositely, in the auto insurance sector where cars are now equipped with safety gizmos including auto steer and pedestrian detection, car insurance rates are skyrocketing. Taking this into consideration, both policy holders and insurers are looking for areas where costs can be managed in the insurance industry and thanks to data and artificial intelligence (AI), they can be.
RANSOMWARE EXPOSURE DRIVING UP CYBER INSURANCE COSTS
Although 2019 had fewer breaches and declining rates of attacks in terms of hacking, ransomware remained problematic in 2019 and is still cause for concern in 2020. Experts, including Adam Kujawa, director of Malwarebytes Labs, recognize that ransomware is now more dangerous and threatening then ever thanks to deeper and more lasting technological problems with hackers demanding bigger payouts. In response to these attacks, cyber-insurance premiums – which often cover ransom, data recovery, legal liabilities, and negotiators fluent in hackers’ native languages — started to rise 5% to 25% late last year.
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NEW SAFETY GIZMOS ARE MAKING CAR INSURANCE MORE EXPENSIVE
In the past decade car insurance rates in the United States climbed 29.6%. Surprisingly, these rising rates can be attributed to new technologies and auto features including auto steer as wells as other radars, cameras, and ultrasonic sensors. Despite these technologies working to prevent crashes and accidents they’ve been proven to make cars more expensive should they need repaired or replaced. “Technology is playing a bigger role than ever in pricing,” says Nicole Beck, The Zebra’s communications chief. “It’s not actually making it cheaper for people.”
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BUILDING THE LIFE INSURANCE POLICY OF THE FUTURE: HOW DATA, AI, AND THE CLOUD ARE CHANGING AN INDUSTRY
Despite the impacts of ransomware and safety gizmos on insurance there are solutions helping to contain costs in the industry. Technologies including data and AI help to cut costs in the insurance sector by reducing time in the claims process among other benefits. “Not only was [traditionally issuing a policy] expensive work it also presented the customer with numerous opportunities to drop out of the policy application process representing not only a lost revenue opportunity for the insurer but also resulting in costs incurred along the way,” explained industry consultant Tom McCarthy.
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