A report from PwC has outlined a “radical reinvention” for the industry and how to achieve seamless insurance service in the coming decade.

The consultant’s Insurance 2030: What’s Your Future? paper includes various “buyer persona” scenarios.

In one, “Frank” puts on a virtual reality headset to check inventory at a car dealer, receiving AI-generated information on insurance available as part of the purchase price.

During his “metaverse session”, Frank also receives offers for motor and home bundles, and learns his home is in a flood-prone area.

“In this scenario, insurers – typically via partners and embedded arrangements – provide immersive experiences throughout the customer life cycle,” PwC says.

“Because they have detailed policyholder profiles populated by [internet of things]/telematics data, providers can identify and price risk effectively.”

Frank later signs and binds a policy virtually as he buys a car. Four months later, his insurer sends a text warning that torrential rain may arrive later that day.

He moves valuable personal items out of his basement and receives a claim settlement five days after the storm for damage to carpets and walls.

In the scenario, the insurer relied on drone and sensor data, and Frank is “thrilled by the proactive service and support”, the report says.

PwC says social, technological, economic, environmental and political shocks are “bringing an end to the predictable world that insurers had known since the 1950s ... The stability insurers have long relied on for predictable risk pricing and consistent growth is disappearing.

“The world has experienced a pandemic, violent political unrest, severe supply chain disruptions, global conflict, high inflation and multiple historically extreme weather events.

“Only 20 years ago, most of these events would have seemed unlikely – for all of them to occur simultaneously, almost unthinkable.”

But most insurers are not “riding the wave of change – they’re just trying not to drown in it”, the report says.

PwC says AI and data can enhance risk assessment, product design and marketing via answer engines, data collection, product customisation and service.

Insurers that stand out are using tech to notify policyholders of impending weather events and potential cyberattacks, and provide information on how to prevent and cope with potential loss.

“The boldest carriers are determining how to create unique business and operating models that redefine the very nature of insurance, helping stakeholders avoid risk in the process,” the paper says.

“This is a long-term goal for most of the industry, stretching through the end of the decade and likely beyond.”

See the report here.