To those outside of the industry, there is a perception thatinsurance is dull and boring, behind the times technologically andcertainly not a field anyone would consider for a career — but theyare so wrong. Insurance is a vibrant, challenging industry wherethe risks and rewards constantly change and the primary focus is tomake a positive impact in the lives of those who need assistancefollowing a devastating loss. And it is the only career option thatoffers a 98 percent chance of employment after college for studentswho choose risk management or other insurance-related majors.

The industry will change substantially in the next three to fiveyears and here are 10 factors that will have a major impact on theauto and property & casualty segments as identified at theJ.D. Power Insurance ClaimsEdge conference last fall.

1. Technology

Technology is a huge driver of customer satisfaction, fromwhether or not a driver's phone syncs with an auto's systems to howeasy it is for policyholders to contact an insurer online or with amobile device. A J.D. Power study found that how well drivers'technology synced their vehicles was a key determiner of whether ornot they would purchase the same car the next time.

Cell phone use continues to play a major role in accidents —accounting for 26 percent of all motor vehicle crashes in 2014 with5 percent of the crashes involving texting and 21 percent involvingpeople who were talking on the phone. In the five seconds it takesa person to take his eyes off of the road while texting, a car cantravel 403 feet at 55 miles per hour — longer than the length of afootball field. While most people don't text at this speed, even at20 miles an hour, a car can still travel about 100 yards.

Despite cell phone use restrictions and texting bans in almostevery state, drivers will still talk and text, and this willcontinue to be an issue for insurers.

2. Aluminum & composite cars

Fuel economy mandates are forcing manufacturers to use morealuminum in cars. By 2025, aluminum use in cars will grow from 343pounds to 550 pounds. Currently, aluminum is used primarily forwheels and engines, but that is increasing to include trunks,hoods, doors and in some cases, the entire body.

The Highway Data Loss Institute conducted three separateanalyses of crash data supplied by companies to estimate the effectof aluminum on repair costs and claims. Using large luxury carsfrom BMW, Mercedes and Audi from 1997 to 2013, they examined thedifferences between aluminum cars and their steel counterparts.

The first analysis examined the Audi A8, BMW 7 and the MercedesBenz S Class and was based on 67,756 collision claims. They foundthat overall claim severity for aluminum Audi A8 cars was 14percent higher compared to their steel counterparts. The Audi A8repairable claims were also 13 percent higher than comparablevehicles. Salvage rates for all of the cars were under 10percent.

The second analysis compared the Audi A6, BMW 5 series, MercedesBenz E class and Jaguar XJ for model years 1997-2013 and involved281,000 collision claims. The analysis compared low component useof aluminum for items like the engine block, hood and fenders;significant usage for the roof, rails, suspension and doors; andhigh use in vehicles that were almost completely composed ofaluminum.

Claims severity was 20 percent higher for high aluminum contentcars compared to 9 percent for medium-use vehicles. Repairableclaims were 19 percent higher for high-use vehicles vs. 5 percentfor medium-use autos.

A third analysis compared the BMW 5 series (model years2004-2010) and conducted a specific point by point comparison ofside, front and rear impacts for aluminum cars. In front-endcollisions, impacts for aluminum vehicles cost 20 percent more thansteel vehicles. There was a 10 percent decrease in collision costsfor rear impact crashes, but the study organizers said this wasn'tstatistically significant, nor were the side impact figures. Theyconcluded that aluminum vehicles had higher collision claimseverities than steel cars and the more aluminum used, the higherthe claims.

As more body shops become equipped to repair aluminum vehicles,this could drive repair prices down. Currently, there aresignificant costs for training and set up since aluminum vehiclesmust be repaired in a facility separate from steel cars because thealuminum particles will break down steel. Aluminum repairs alsorequire different tools and techniques, which add to the costs.

3. Millennials

Fewer millennials are buying cars, which reduces the number ofinsurance policies. They have a lot of ride-sharing options or theylive close enough to work to take mass transit, walk or ride theirbikes. In addition, public transportation apps are changing the waypeople get around.

Transportation network companies like Uber, Zipcar, Lyft arespringing up in cities around the globe — creating a newtransportation option, as well as coverage issues for insurers.Technology is changing the ride options for millions of consumersas smartphone users can access a number of transportationoptions.

All of these factors will have some impact on car insuranceincluding who is insured, who isn't, who is liable in case of anaccident and what coverage is required.

4. Self-service insurance

Mobile apps are changing the way insurers provide services totheir customers who can now purchase insurance online, file a claimor follow the claim as it progresses.

Insurers like USAA, Allstate and State Farm have apps that allowcustomers to send photos of claims to a desktop adjuster who guidesthe policyholders on what pictures to take so they can file thefirst notice of loss even faster and more completely. The apps canalso provide feedback, driving tips and other helpful informationto help insureds reduce or manage their risk.

Policyholders are demanding access to insurers and informationvia their mobile devices on a 24/7 basis and for insurers thechallenge involves meeting those needs without losing the personalinteraction with customers.

5. Autonomous cars

Self-driving cars are closer to becoming a reality. Google hasbeen testing vehicles for several years and expects to introduce aworking car by 2020. Volvo, Toyota, Mercedes and Audi are alltesting autonomous cars as well. Some will be fully autonomous andothers will allow drivers to switch back and forth betweenautomatic driving and allowing the human driver to havecontrol.

Since Google introduced their prototypes, they have traveled 1.2million miles on public roads, obtained a top speed of 25 mph andcan actually be summoned by a smart phone. Volvo expects to haveits cars tested on city streets by ordinary drivers by 2017. Butall of this autonomy raises several interesting issues forinsurers:

• Will car insurance become obsolete?

• With several manufacturers willing to accept liability foraccidents involving their technology, the responsibility shiftsaway from the driver to product liability for manufacturers, whichin turn will impact insurers.

• Given the number of recalls the industry saw in 2014 for airbags, ignition switches and other parts, this opens up areas ofsubrogation for suppliers whose parts are defective or malfunctionin autonomous vehicles.

• If the driver can switch back and forth from the car beingautonomous to the driver being in control — who will be liable ifthere is an accident — the driver or the car?

Manufacturers need to be aware of the vulnerabilities associatedwith autonomous cars and how to address them. Insurers shouldconsider how they will provide coverage to manage the risks withthese vehicles.

6. Product recalls

In 2014, more than 16.5 million vehicles were sold, but it was arecord-setting year for recalls with

63.7 million vehicles recalled for everything from ignitionswitches to faulty airbags. The previous record was 30.8 million in2004.

With self-driving cars, product liability could significantlyincrease for manufacturers and their insurers.

7. New technology

When it comes to new technology for property adjusting, thereare a number of exciting options from companies like Spike, Spex, and Livegenic that allow adjusters touse tablets, cell phones and other mobile devices to quickly andeffectively adjust losses.

New technologies are particularly important because they willhelp to mitigate the major talent shortage the industry willexperience in the next three years when 25 percent of insuranceprofessionals retire. This will mean more self-adjusting byinsureds, who will send information to office adjusters. For fieldadjusters, some of the technologies that will impact how they willcollect information include Google Glass, drones and maybe evenrobots.

8. Natural disasters

All things considered, 2015 was a fairly mild year forcatastrophes until the last quarter. Insurers saw theirprofitability increase 97 percent in the first quarter of 2015 ascompared to the same period in 2014, which saw growth of 95.7percent. However, flooding from Hurricane Patricia, heavy rains inNorth and South Carolina, combined with wildfires earlier in theyear caused at least $24 billion in property losses. Still, ascatastrophes become more severe and damage more infrastructure, theeconomic impact for insurers and policyholders will continue torise.

9. Cyber security/Fraud

In 2012, insurers wrote $850 million in cyber coverage; by 2014that figure had risen to $2.5 billion with global losses of $445billion. Approximately 90 percent of the cyber premiums are writtenin the U.S.

According to Travelers Insurance, 50 percent of small businesseshave been hacked and 60 percent of the attacks in 2014 struck smallto medium-sized businesses. All data has value and some informationsuch as social security numbers or healthcare records, commandhigher prices than cell phone numbers or passwords.

Ransomware and social engineering fraud are two newer versionsof cyber fraud insurers and businesses should be aware of them whencreating a cyber risk management program.

10. Emerging risks

There are a number of emerging risks that insurers would be wiseto monitor because of the increased threats associated with them.Legalized marijuana, drugged driving and fracking are three of thebiggest risks that will affect insurers and require specializedcoverage in the coming years.

Increased drug use

Drugs — both legal and illegal — are impacting Auto, Propertyand Workers' Compensation insurance. Approximately 40 percent offatally injured drivers tested positive for drugs — almost the samenumber as those testing positive for alcohol. Testing for drugs iscomplicated since there are 430 specific drugs or metabolites inthe national highway safety fatality database. The National HighwayTraffic Safety Administration found that 22 percent of all driversin a recent roadside survey tested positive for drugs or some typeof medication

Legalized marijuana

As more and more states legalize marijuana, it will begin toimpact employers as well as multiple insurance lines like Auto andWorkers' Comp, creating conflicts between individual states andinsurers due to the lack of federal regulations.

Fracking

From 1975-2008, Oklahoma had less than three earthquakesregistering 3.0 or larger in a year. That figure rose dramaticallyto 40 per year beginning in 2009, when the state allowed fracking.Currently, Oklahoma has more 3.0 or greater earthquakes thanCalifornia, and in 2015 was on pace to endure close to 1,000earthquakes. There is a concern that the increase in moderate-sizedearthquakes could raise the risk of larger ones in the future

Where the injection of fracking wastewater has stopped, so havethe earthquakes. Another concern involves large oil storage tanksthat were located in Oklahoma after 9/11. So far, no damage hasbeen reported by the companies that own the tanks, but businessesaround the fracking fields have been advised to update theiremergency disaster plans just in case a leak or something worseoccurs.

Additional risks

Other factors that could impact the industry include an increasein mergers & acquisitions in the insurance and otherindustries. Consolidation has benefits, but also involves initialexpenses as the companies combine resources and workforces, mergework styles and environments, and create fewer options in theirrespective marketplaces.

Decaying infrastructure due to aging and poor maintenance willimpact property and casualty covers, and possibly involveenvironmental damage because of aging pipelines that fail.

Sinking cities due to groundwater mismanagement could result indamage to buildings, foundations, substructures, gas pipes andincrease the potential for large property and casualty claims.

Risks from extreme weather and wildfires will also continue toincrease as their frequency and severity have global implicationson supply chains, as well as property and casualty claims.

As insurers and risk managers know, the challenge will beidentifying the coverage gaps associated with many of thesefactors, as well as the opportunities they present. One thing iscertain, it will never be boring.