Morning Briefing: This will transform the insurance industry

This will transform the insurance industry… Nevada insurance commissioner resigns… Could driverless cars mean the end for auto insurance?

Risk Management News


This will transform the insurance industry
A new study concludes that software as a service (SaaS) will transform the global insurance industry over the next five years. The use of centrally-hosted applications and cloud storage solutions will lead to innovation in the sector but many insurers are not ready for the change. The report by global analyst house Ovum reveals that a third of insurance companies globally are using or trialling SaaS solutions although they remain cautious about its use on risk, regulatory and compliance grounds. Among the reasons for implementing SaaS is cost reduction and flexibility; rolling out software across a growing business can be less expensive using cloud based solutions rather than in-house. The study warns that it is vital for insurance companies to plan for greater SaaS use to avoid being left behind as the industry innovates.
Nevada insurance commissioner resigns
The commissioner of insurance in Nevada has resigned unexpectedly with no reason given. Scott J. Kipper will leave his post on July 2. Kipper has been in the post since 2011, and also held the role from 2008 to 2010. He was an insurance agent in Wyoming before taking a senior role at the Louisiana Department of Insurance and Louisiana Office of Group Benefits and was also insurance commissioner in Oregon. The Review Journal says that Nevada has been identified as one of the top insurance divisions in the US.
Could driverless cars mean the end for auto insurance?
Driverless cars are increasingly being cited as a big thing in the very near future, despite much scepticism among consumers. While analysts in the insurance sector consider how using the vehicles’ technology to reduce accidents and provide valuable data some believe that driverless cars will end auto insurance all together. An article at highlights that with no driver the liability for accidents will rest not with vehicle owners, but with vehicle manufacturers or software developers. Federico Guerrini cites a report written by a student at Yale Law School which concludes ““Eliminating the entire automobile insurance industry (which has roughly $200 billion dollars in annual revenue) would be a monumental boost to administrative efficiency.” He goes on to say that while that is a huge loss to the insurance industry it would recover from policies with manufacturers instead. As auto makers are unlikely to absorb the cost of insurance this will surely be passed on to consumers, perhaps as an annual or monthly premium paid directly to the manufacturers’ insurers? Perhaps auto insurance will survive after all!

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