A 5G quantum world will change the insurance sector
The 5G race around the world is a closely watched one as it ushers us into an era of hyperconnectivity like no other.
Looking back at how the 4G network rollout has catalysed the digital evolution of the modern world nearly a decade ago - giving rise to the Internet of Things (IOT) linking people, machines and devices together to a collective digital consciousness - it is exhilarating to imagine what will unfold with the introduction of 5G networks, the next generation of mobile Internet connectivity.
Compared to the current 4G, 5G promises far greater bandwidth and capacity, and requires less power to transmit a massive volume of data. At its peak download speed, 5G could be 1,000 times faster than 4G at 100 gigabits per second.
Beyond providing a faster and more reliable data transmission for the end users, 5G represents both a revolution and evolution in our progress towards a smarter and more connected world.
The reduction to extremely low latency speeds of four milliseconds on a 5G mobile connection holds the potential to enable a whole range of new applications and services that are yet to be supported on today's networks. Highly sophisticated technology applications - such as artificial intelligence, autonomous vehicles, smart manufacturing, robotic surgery and more - will get the infrastructure that they require to truly take flight. With Singapore planning to roll out 5G networks by the second half of 2020, we can expect more Smart Nation initiatives to take off, including those that could have a deep impact on the world of insurance.
Indeed, 5G represents tremendous opportunities and challenges for businesses all of sizes. As consumer expectations of a seamless connection across all aspects of their lives are set to be realised on the 5G network, governments and businesses can re-imagine a sea of possibilities for innovations that can connect people, machines and infrastructure in a whole new augmented reality. A survey by Qualcomm has found that 91 per cent of its respondents expect new products and services that have yet to be invented, and 87 per cent expect new industries to emerge with the introduction of 5G connectivity.
The Future is Digital-First
5G technology may well be the game changer for more innovations to come, bringing about a shift of business models to digital platforms.
For a start, with 5G mobile connectivity, we will see an upsurge in the adoption of mobile devices, making mobile channels the dominant gateway for consumer access. Consumers will come to expect faster digital services and complex transactions to be conducted on and adapted for mobile with some simplification of the whole process.
For insurers, this will translate to the digitalisation of the entire customer journey on mobile, from customer queries to direct e-commerce and claims submissions.
We can look to a future where insurers are able to digitise their customer engagement using artificial intelligence (AI) and augmented reality (AR). Customers could obtain an insurance quote through a chatbot powered by AI and submit claims with supported documents overlaid through augmented reality, while on the back end, insurers would mobilise a virtual workforce of software bots to set the parameters for claims assessment and speed up the approval process.
Intelligent Coverage for Intelligent Living
The 5G network is designed to support an entire ecosystem of fully connected intelligent sensors and devices that will be able to "speak" to each other, sharing crucial information and reducing preventable risks.
With the rise of 5G intelligence, there could be an exponential rise in the adoption of IOT, along with the huge amount of data that they generate. According to IHS Markit, there will be as many as 125 billion devices expected to be linked through IOT by 2030.
In the days ahead, your car could tell you exactly where its overheated parts are, preventing a potential accident, or alert your insurer and capture vital information that could speed up the claims process. With the emergence of autonomous vehicles, vehicle-to-vehicle communications through IOT will be an increasingly critical feature in fostering a safe driving environment. Motor vehicles would leverage a 5G network to communicate and share data with each other as well as with the insurance provider in real time, spurring the creation of more innovative usage-based insurance solutions.
In the healthcare insurance space, 5G will enable always-on device connectivity, power telehealth solutions and enhance data sharing among patients, caregivers and insurers, bringing connected health care to the next level.
With more data available leading to greater accuracy in health and life insurance quotes, this will help to drive down premiums and contribute to a more personalised, proactive and predictive approach to health insurance, and where consumers are incentivised to keep fit.
Ultimately, the roll-out of this next-generation mobile connection will be a monumental development that redefines the economic fundamentals for the insurance industry, the genesis of which was to protect consumers from the risk of financial loss in the future based on limited information. There will be much to deliver on the promised value of more accurate real-time data in a 5G world, and what it means for the industry is a huge leap forward to insure the unknown with greater certainty.
An edited version of this article has been published in The Business Times on 28 June 2019.
The article was contributed by Craig Ellis, CEO, MSIG Insurance (Singapore) Pte. Ltd.