The global insurance market is feeling the pressure to adapt to technology-related changes. Previously considered to be a traditional and conservative business, Insurance, is on the verge of breaking out of its outdated mold. Continuous technological innovations, well informed and demanding customers along with intensely competitive market have paved the way for a new future to be written for the “Insurance Industry”. With the help of automation and AI (Artificial Intelligence), today’s insurers plan to woo the customer. The technology trends in the insurance industry are likely to set the ball rolling to herald an era of ‘digital first’. Only those players who embrace the change will survive the dramatic transformation and come out on the top. Those who fail will alas! Bite the dust. So what are these technology trends in the insurance sector to look out for?
Technology Trends To Look Out For In Insurance Industry
Tech trends that are likely to impact the insurance sector in 2019 and beyond will modernize every aspect of insurance. This includes underwriting, claim processing, buying and selling of insurance and much more. Exciting times are ahead.
1.Machine Learning – Yes, machine learning is nothing new. It was already there, so what’s the big deal? The big deal is that until now machine learning was restricted to routine operations like compliance checks, customer communication, and data entry. Now it will begin at the very top of the chain. Automation will be used in conjunction with machine learning to make underwriting decisions. Capable intelligent systems will be used to process claims and settle them with minimum fuss.
2. Data From All Relevant Sources – Traditional insurers collected data based on the past history of the insured. That will now become a thing of the past. Yes, it will still be considered. No, it will not be the only consideration. Advanced data analytics and proactive collection of data is the call of the day. Data will be collected through various sources like:
- Smart devices connected through IoT (Internet of Things).
- Social media pages.
- Telematics (GPS, drone and imaging technologies)for monitoring physical assets.
Based on the big picture created by this data relevant decisions will be taken. The insurers will get an innovative insight into not only the insured’s behavior but also that of others like him. The big data analytics will allow the insurers to make better predictive models and achieve their prime objectives.
3. IoT – As mentioned above smart devices connected through the Internet of Things will be used to collect data. The prime benefit of this will be to the health insurers. Wearable tech products will help them build a general health picture of the insured. In the near future, it will also warn the insured when they are most likely to fall ill. Timely precautions will prevent illness and reduce claims. In the same manner, smart cars can also send and receive data. In case of an accident, the data can be used to determine the fault of the driver as well as damage to the car. No need for actual physical inspection of the asset. Also, the parties concerned need not run helter-skelter for the insurance settlement. All the necessary data is available at the touch of a key thanks to IoT.
4. Artificial Intelligence – AI is already the core of many businesses. Insurance has been slow in absorbing it but slowly and steadily the changes are happening. Today, AI is primarily used in evaluating the risks and categorizing the offers that are most suitable for meeting the needs of both the insurer and the insured. Going forward, artificial intelligence will be used widely in the form of audio, video and image analysis. It will also be used in decision management and robotic automation of processes like claims, compliance, and auditing. Bots will be used increasingly to move claims faster and deliver personalized services to the customers. It’s not just the front desk operations that will be affected but also the back office ones.
5. Blockchain Mainstreaming – Data is the very core of insurance. For the best possible decision making it is necessary that the data flows from one stakeholder to another uninterrupted and secure. This is where blockchain technology comes into play. It provides safe and secure data management across numerous interfaces and stakeholders without compromising its integrity. Interestingly, mainstreaming blockchain will also reduce the operational costs, make for DAOs (Decentralized Autonomous Organizations) as well as smart contracts.
InsurTech A Revolution
Time has come. It’s either now or never. The insurance sector needs to leave behind its conservative approach and make way for InsurTech (technology aided insurance). It needs to innovate and reform to embrace change. This will help create a new value for the insurance industry which will be worth billions of dollars. Until now caution has been the key to success. But now the success lies in leveraging technology to the benefit of all. It will increase process efficiencies, provide improved customer experience and bring down costs. In the end, the value additions, to both the insurer and the insured, demand for technology in insurance or InsurTech.
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