A quiet revolution is underway, as technology changes the wayinsurers and consumers interact.

Part of that revolution can be attributed to the Internet andmobile devices. These command a small portion of the market interms of premiums, but are having a "profound effect" ondistribution channels, according to Swiss Re's sigma "Digital distribution in insurance: A quietrevolution."  

Consumers are increasingly researching policies, solicitingadvice and obtaining personalized quotes online. They complete thesale online and turn to the Internet for post-sales assistance,including policy administration, claims and risk managementservices.

Today, consumers " increasingly expect to interact with theirinsurance provider or advisor on their own schedules, at all timesand through multiple channels," which includes the phone, onlineself-service, click-to-chat, the sigma reports.

Online and mobile technology provide insurers with a rich sourceof data about their customers. Innovations in Big Data allowinsurers to boost sales and marketing strategies. For example,price comparison websites and social media play a growing role inthe pre-sales process, especially in the auto and homeowners'sectors in developed markets.

"The experience of UK personal motor insurance markets, wheree-commerce sales now dominate, shows how quickly consumer buyingpatterns can change," the sigma's authors say. "A 2014 surveyindicated that by 2018, insurers anticipate nearly one fifth oftheir business will come from online sales through personalcomputers."

Mobile-specific features increase interactivity and ease-of-useto better engage customers. But insuers emphasize simplicity indesign, recognizing that customers are unlikely to review a lengthypolicy on their smartphones, but will use their smartphones toupdate  policy, submit damage photos or submit aclaim.

Telematics and the shift toward usage-based insurance allowsinsurers to provide personalized coverages and more accuraterisk-based pricing that differentiates themselves from theircompetition. Since Progressive first offered UBI in the early1990s, more than 1.4 million drivers in the U.S. have tried itsprogram, of whom two-thirds have earned a premium discount of 10%to 15%.

The sigma's authors conclude that new technology will eventuallyenable customers to arrange almost all of their insurance needsthrough remote digital channels. But this doesn't spell the end ofintermediaries. Customers will continue to value personalinteraction and expert advice, especially for complex commercialand life and health risks.  Agents and brokers will bechallenges to adapt business models to meet customers' evolvingneeds and preferences, while keeping integration and multipledistribution channels under control.