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How the 5G revolution will affect the world of insurance

Wireless networks were introduced more than three decades ago, but it was not until the arrival of 3G in 2008 that the digital revolution was truly recognised. Three years later, 4G coverage began to be introduced and meant an improvement in speed compared to its predecessor, from an average of 3 megabits per second in the third generation to 12 megabits per second in the fourth. In addition, the quality and capacity of navigation on mobile devices improved, with greater access to IP telephony, high-definition video conferencing and television.

But the evolution of networks is relentless, and now the new challenge is to implement the fifth generation, which will be between 10 and 20 times faster than previous versions – 5G is knocking at the door. It is also safer and more reliable, and will not only affect our daily lives, such as being able to watch a streamed film faster; its full implementation will condition the future of networks.

An example of this is the fact that, despite being a technology that is still in development, the race to see who gets it up and running fastest is unleashing competition not only between network installation companies, but also between countries such as China and the United States. The fear that China will install a nationalised 5G network has alarmed North America, which does not want to lose the lead in this race for connectivity.

The recent report 5G in industrial operations by consulting firm Capgemini pointed out how the introduction of these networks is key to digital transformation. After surveying over 800 companies, more than half explained that introducing these networks will help them improve their efficiency and allow them to operate more securely.

Although the report does not mention insurance specifically, it does talk about technologies inherently related to the sector, such as the Internet of Things (IoT). 5G is a window of opportunity for insurers because it offers greater efficacy, and a more precise and accurate calculation of risks.

Connectivity - insur_space by MAPFRE

Access to these networks and the increase in connection speeds will make it faster to communicate an alarm. For example, the alarm of a house with IoT will be able to connect sooner with a central HQ, or collect evidence to speed up the claim process. In the case of health insurance, enhancing interaction in real time patient care will also be better, because it can prevent unexpected events and increase precision.
The futurologist Thomas Frey, who writes about innovation, foresees in this article how with the widespread deployment of 5G there will be prevention systems on farms to advise on meteorological risks and plagues, and the fact that drones will give a rapid response to an insurance claim because they will be able to quickly scan a house, a vehicle or a business.

With regard to employability, the consultancy IHS Markit and Research estimated in a study that the implementation of 5G will generate 22 million jobs globally. In particular, this research argues that the insurance sector will benefit when self-driving vehicles are more widespread, as it will decrease the accident rate.

5G will affect all industries, although it is important to point out that its speed will depend on the supplier and the location, and that its breakthrough will be staggered. However, it is time for insurers and all the technologies around them to start preparing to adapt to this innovation.