The global insurance industry, worth over $5 trillion, has had an extensive overhaul. Previously considered to be a conservative sector, the industry is on the verge of breaking out of its old mold. Insurance technology is now taking the front seat.
Multiple technological inventions and informed customers have paved the way for the industry overhaul. With the help of artificial intelligence and automation, today’s insurance will continue to woo many customers.
The industry is poised to keep on maturing. At any rate, players who adopt the change will survive the transformation and emerge the top.
In this article, we have discussed the main ways in which insurance technology is pushing the sector forward. Hopefully, this information will give you insights on what to look out for to survive in the industry.
1. Machine Learning
Machine learning is a specific branch of artificial intelligence. It is based on the idea that we can change our machines to process data without supervision.
Machine learning is not new. So why are we mentioning it here? Until now, this technology was restricted to routine activities such as data entry and compliance checks.
Currently, machine learning is applied in underwriting and other crucial insurance activities. Since the main aim of machine learning is to automate, it improves speed and accuracy.
2. Internet of Things
IoT devices, telematics, and sensors are now utilized in the insurance industry. For instance, location-based sensors coupled with other tools help to improve risk assessment.
Many customers are willing to share their personal information to save on their policies. Luckily, the internet of things helps to automate the data they share. It also encourages them to buy certain policies to avoid losses.
Insurance companies can use data from wearable technologies to mitigate risks. They also use it to prevent losses and determine rates.
If many companies continue to use this technology, it will provide first-hand data and improve the risk assessment process as well. Eventually, this will bring positive impacts on insurance policy pricing.
3. Social Media Data
Social media has the power to influence a large number of people, including in the insurance sector. Besides marketing, many insurers are now using it to improve risk assessment and bolster fraud detection.
For instance, consider Kroodle, a Dutch insurance company. It only interacts with customers through social media.
Customers log into their Facebook accounts and get quotes, and also file their claims and get other services through the app.
How does insurance technology help to investigate frauds in social media? Insurance firms observe the social activities of the insured people. The firms use the posts or other details that the customers post to compare to the claim records.
Unmanned drones are efficient technology tools. The insurance industry is utilizing drones to manage risks.
Drones reduce operational costs and facilitating better collection of data. Drones help to collect data, calculate risks, before giving feedback to any claim. In case of a disaster, a drone is deployed to provide feedback on the extent of the disaster.
Farmers Insurance is an excellent example of firms which use drone technology. The company deploys Kespry drones to help in identifying residential property damage.
5. Mainstreaming Blockchain
Data is a core element for every insurance company. For easy decision making, it is advisable to have a smooth and uninterrupted flow of data from one source to the other.
This is where blockchain comes into play. It guarantees secure data management across stakeholders while maintaining integrity. Also, from fraud management to underwriting, blockchain technology reduces operational costs and offers extra benefits such as smart contracts.
6. Artificial Intelligence
82 percent of the companies that have invested in AI, including insurance companies, report to have made financial returns.
Customers seek personalized experiences when dealing with insurance and technology. This is because insurance is a highly sensitive industry. Artificial intelligence gives them satisfaction by creating unique experiences for their demands.
AI has also improved the claims cycle by making the underwriting process straightforward.
According to an Accenture survey, 68 percent of insurance companies use chatbots to settle their claims. Through the use of chatbots, the insurance industry has been able to personalize human interaction.
As per a report by PWC, the primary purpose of artificial intelligence is to automate and increase business efficiency. With time, its impact becomes more profound, making it possible to identify new sources of revenue.
How Have The Above Trends Improved Insurance Technology?
The above-discussed technologies have brought seismic impacts in the insurance industry. These include:
Wearable devices and fitness apps – The above technological trends have brought many fitness apps. The main aim of these apps is to help people maintain a healthy weight. They help to reduce insurance costs, and that’s why many insurers recommended wearable devices and apps.
Fraud prevention – Fraud can cost insurance companies billions of dollars. The above technological frameworks help to manage insurance related scams.
Billing efficiency – automated systems remind customers when the due date for their premium approaches. This helps to lower the unintentional defaults.
Internet – Connected devices provide real-time information. Insurance firms use that information for better pricing. This helps to lower underwriting costs.
From distribution to claims to pricing, all activities are examined prior. If more insurance companies continue to embrace these trends, the entire insurance industry will change.
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