The cloud is the foundation for the successful application of quantum computing. Carriers need to strengthen cloud adoption and optimise the way they leverage the cloud to collect data in preparation for using quantum computing to get ahead.
5G is already having a transformative effect on the global economy as businesses can utilise lower latency, higher uploads and downloads, real-time data analytics and efficiency, all at the same time.
As 5G towers begin to conspicuously populate our communities, we ask what the technology will mean for the insurance industry
Qualcomm, the multinational semiconductor and telecommunications firm based in the US, says the global 5G standard will enhance mobile services from “a set of technologies connecting people-to-people and people-to-information to a unified connectivity fabric connecting people to everything”.
Despite the highly publicised rollouts of 5G globally, the revolution is still in its infancy. In comparison to 4G, 5G offers massive bandwidth and capacity, needing less power to transmit oceans of data. Peak download speed is estimated to be 1,000 times faster than 4G at 100GB per second.
Qualcomm also says 5G’s full capacity won’t be seen worldwide until 2035 and predicts that, by that year, the technology could potentially produce up to US$12.3tn of goods and services.
Insurance driven by quantum technology
The benefits for the insurance industry are clear. It’s a space that thrives on the collection and analysis of data. With enhanced technologies such as AI, the possibilities of assessing risks and handling claims at lightning speeds, all while reducing costs for customers and creating new products, are seemingly endless.
Higher bandwidth, lower latency and more reliable networks provided by 5G will create a foundation for secure, real-time applications and services.
Pervasive data streams fuelled by ubiquitous connectivity will require real-time platforms that combine disparate data, filter and aggregate data, and leverage AI to provide actionable intelligence. The technology could also result in better security for customers.
Drawing on 5G’s benefits, mobile and wearable device-initiated commerce has the potential to grow at a much faster pace. 5G networks will, for example, enable real-time fraud checks, catapulting mobile payments to mainstream adoption.
IoT, 5G and insurtech innovation
But just how much are IoT devices influencing events in the insurtech sector? And which areas have seen the biggest uptake? The value of data and increasingly want to use it to enhance decision-making. Despite this, the sheer infrastructure required to handle the increase in the data flow is a challenge that’s yet to be overcome.
The problem is that the sheer volume of data can easily become overwhelming, and many don’t have the right IT infrastructure to support it.
Many insurtechs are still reliant on inflexible, legacy, on-premise infrastructure, which puts them at risk from newer entrants, the majority of which are now cloud native. To succeed, they need the ability to quickly ingest and process data, which itself will be dependent on having a connected, secure, reliable, scalable, flexible, resilient, and low-latency IT infrastructure.
Cloud services will provide essential services to insurtechs managing vast volumes of data.
Colocation can be an attractive solution, providing the extra capacity required while also enabling insuretechs to benefit from fast, secure and direct connections to cloud service providers.
InsurTech data in a connected ecosystem
The benefits of better connectivity are numerous. Nevertheless, some industry experts have raised questions related to security, citing increased vulnerability to breaches as the cyber footprint increases. As 5G mobile technology grows, networks will switch to more distributed and software-defined digital routing. This results in more nodes communicating with each other.
It really opens up the surface area that’s vulnerable to cyberattacks. And so, as we approach 5G in the next couple of years, we need to think about network security.
The way that networks are secured today is going to need to be completely re-thought in order to incorporate all of this technology and all of this new bandwidth.
That’s going to really change the game for cyber insurers, and it’s going to be a real challenge for the insurance industry as a whole. It has certainly captured my attention, because a lot of this technology will be coming online in the next two or three years.
The future of insurtech and 5G
As more industries adapt to utilise 5G, sectors will diversify and enter new phases, which will include increased gamification for incentive initiatives, more widespread uses in health insurance, auto insurance, the P&C space, and more.
5G will offer many benefits for insurtech companies, including reduced latency to help decrease transaction and settlement times. It will also facilitate the adoption of AI to enable greater personalisation and improvements to customer experience.
This additional data traffic will put more stress on backbone networks, meaning many will need to find ways to increase their available bandwidth and likely data centre capacity.
These issues will be addressed in stages – and investment will be needed to ensure the transition to quantum insurance services are successful. Decentralised data centres will also be required as time goes on.
Big cities hold the infrastructure to support better data connectivity. In more rural areas, the infrastructure may not be as robust. Therefore, information systems may not be the latest and greatest currently in all locations. Additionally, 5G technology is able to cover vast distances; therefore, the data centres supporting 5G tech need to be able to be decentralised.
AUTHORS: Jim Bramblet – Accenture’s Managing Director Insurance Lead for North America, Manish Devgan – Chief Product Officer at Hazelcast, Mark White – Senior Manager Financial Markets and Fintech at Telehouse Europe, Brad Gow – global cyber product leader at Sompo International, Boris Cipot – Senior Security Engineer at Synopsys Software Integrity Group