InsurTech is a trending word these days, and it refers to a group of technologies that are poised to disrupt the old insurance sector. Many insurers have already gone digital in order to provide their consumers with ease, security, choice, and comparison. The Internet of Things (IoT), telematics, drones, the blockchain, smart contracts, and artificial intelligence (AI) are all enabling new ways to assess, control, and price risk, engage with customers, cut costs, improve efficiency, and improve customer experience.
Here are the top strategies for insurers to keep ahead of the competition and meet high client expectations.
1. Lower Insurance Rates
Wearable devices or fitness apps
Getting in shape offers numerous advantages. Fitness apps like Wysa and wearable devices can help you manage your weight, eat healthier, and feel better. Most importantly, they can help you save a significant amount of money on your health insurance premiums. Various insurance companies are utilizing wearable gadgets to keep their consumers informed about staying in shape and healthy, as well as to offer them numerous discounts and rewards if they accomplish the essential fitness targets.
Self-driving cars will eventually reduce life insurance premiums. Because road deaths account for a major portion of all deaths worldwide, any modest decrease will result in fewer deaths and, as a result, fewer life insurance claims.
2. Anti-fraud measures
Fraud arises in many different forms. Globally, insurance fraud costs businesses billions of dollars each year. Insurance businesses should create a technology foundation, use advanced automation and analytics, and take preventative measures.
Technology for Digital Signatures
Without a doubt, digital signature technology is reducing false insurance account activation and thereby fraud. For example, claims on a specific day when insurance is acquired after an accident can be reduced using digital signatures that verify the purchase was made after the incident.
Data mining tools and quantitative analysis are used in the technology. Fraud can be detected via data analytics. Predictive analytics aids in the detection of fraud and the avoidance of claim payouts. Claims and fraud transaction analytics help to improve risk management.
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3. Lower underwriting cost
By 2020, the number of internet-connected devices and sensors is expected to exceed 50 billion, resulting in a huge increase in the amount of real-time data available to insurers for better pricing and underwriting. At least in terms of underwriting, drones are satellites on steroids. Satellites have revolutionized the way house insurance plans are created in the event of a fire. Drone footage will underwrite a variety of things, including: Due to foliage, you can’t even see the houses.
4. Effective Billing
Billing systems are now not only connected, but they may also take a variety of payment methods, giving customers maximum flexibility and making billing systems more efficient. Automated systems can notify and remind clients of upcoming premium due dates, reducing unintended defaults.
5. Specialized Insurance
Each sort of insurance is distinct, and the variables that apply to one are not applicable to the other. This necessitates specialized expertise on the part of the insurance brokers, which the internet can facilitate. Machine learning, on the other hand, is critical. It can learn and analyze billions of patterns, as well as identify appropriate underwriting clauses and particular customized programs for customers based on the data provided. This can alter the consumer’s view of the insurance company and result in a more engaged customer who is more inclined to stay.
Emerging technologies have created numerous opportunities for insurers to keep up with the times, deliver a consistent client experience, and develop new services and products.
Possible Ways To Incorporate Technology Into Insurance
1. AI in practice
While several companies are experimenting with AI, just a handful have extended their capabilities across the board. Carriers will be able to radically reengineer key operations to be more predictive in nature as AI becomes more ubiquitous and algorithm production gets commoditized. As fundamental operations become AI-enabled, distribution, underwriting, claims, and service will be disrupted, resulting in a “person in the loop” paradigm that boosts efficiency and allows for higher-quality client interactions. Carriers haven’t properly realized the value of their data assets, such as claims history and distribution relationships. Leading carriers and ecosystem players will employ AI to generate goods and services based on data and analytics, in addition to reengineering fundamental operations.
2. Infrastructure that is distributed
Many fundamental procedures are slowed by massive on-premise legacy systems, which are burdening insurers throughout the globe. As the cloud evolves, insurers will be able to introduce new products faster and provide better customer service by rapidly moving their critical operations to the cloud. The cloud will also be crucial for providing the sort of processing capacity required to completely comprehend and use the massive data collections (such as tens of millions of claims data points). Cloud-native insurers will be best positioned to operate as ecosystem orchestrators as ecosystems emerge internationally, operating as a connecting point for clients, distributors, insurtech, healthcare providers, carriers, and reinsurers, among others.
3. Connectivity’s Future
Insurers have started to use telematics to improve the basic vehicle product in several regions. IoT adoption might result in a comparable restructuring of products in the life, health, property, and business sectors. Increased frequency and precision of data given through IoT devices help consumers create a more accurate picture of their requirements and insurers better evaluate risk, both at the moment of purchase and over time. Because 5G is becoming more common, this data can be exchanged more quickly, allowing insurers to give real-time services to their customers.
4. Virtualization and automation of next-generation processes
Insurers have been investing in robotic process automation for years to assist automate procedures, particularly in back-office operations, but new technology will allow carriers to radically rethink products and services. Industrial IoT, for example, may enable real-time monitoring of equipment to allow for predictive repair before claims arise. Digital twins, as well as 3D and 4D printing, have the potential to revolutionize the claims process for all types of physical damage.