Over the past decade, there has been exponential growth in the use of technology in almost every industry worldwide. The insurance industry has been slower to take up new technology developments, with many insurance companies citing legacy infrastructure and software as obstacles for digitalisation.
The use of technology is going to continue to see huge growth in the future. The emergence of insurtech companies offering insurance services utilising new technology trends will gain an edge over their competition.
In addition, insurance companies are looking for evergreen technology solutions that can adapt with changing market demands. So how is technology helping insurance companies?
How is new technology influencing insurance?
Several key digital technologies are driving the changes that will be seen in the insurance industry in the future.
Data is a crucial factor in how insurance companies operate. Predictive analytics are used to predict future events by analysing past data, looking at the behaviour and needs of customers, and providing insight into insurer offers that need to adapt, such as policies or pricing strategies.
Blockchain or distributed ledger technology (DLT) is a way to protect personal data and ensure it can’t be hacked. Blockchain is the underlying technology of cryptocurrencies, a system of “blocks” that link to each other, each with its own encrypted hash and timestamp. This increases customer trust in their insurer to protect their data. It also allows for better fraud detection and prevention
Internet of Things (IoT)
Most people are leaving a digital trail and not even aware of it. The Internet of Things (IoT) collects data from our smart devices and social media and allows insurance products to be personalised based on this information. Almost every customer is willing to share their personal digital data to enable more accurate risk assessments and lower insurance rates as a result.
Automation and machine learning
Machine learning and technology automation is used by insurance carriers to improve the process of creating policies, claims registrations, and even settlements of claims. Automating the claims process enhances customer servicing, while reducing the time claims take to settle. Processing applications that normally take up to two weeks can be complete in 20 minutes. This technology can also find billing issues and errors, as well as enable predictive pricing, to give potential customers more information to encourage them to sign up.
Not a new technology, artificial intelligence (AI) is being used widely in many industries, from manufacturing to the medical sector. AI creates a more personalised service offering from insurance companies to their customers by use of chatbots or facial recognition.
It’s believed in less than five years, more than 90% of customer interactions will be handled by chatbots, which is AI enabled to communicate intelligently with people. Most commonly faced problems and queries can be handled by chatbots, saving insurance companies a great deal of time and resources. The bots can also complete common processes such as pre-filling forms for life insurance or policy applications, leaving complex cases in the hands of humans. Making a customer experience simpler by enabling them to directly interact with the insurer to offer new and personalised services means contracts are more likely to be renewed.
How does technology add value to the insurance industry?
This type of digital transformation works well for both insurance companies and customers. The type of data available about customers, both past history and in real time, allows insurers to differentiate from competitors and offer unique, tailored products and services.
Traditional insurance offers similar products with similar pricing points. To grow your business, it’s vital to offer something that others don’t. Adding a unique feature or service to each policy sold is a great way to distinguish your business from the competition.
Customers expect more today – personalised policies and services, as well as instant support and help. Digital technology increases the ability to tailor marketing, particularly via social media, to target and reach specific audiences for the greatest impact.
Insurance providers are constantly under pressure to stay competitive and grow their customer base while also retaining existing customers. Technology no longer restricts companies to where they can offer their services. This allows them to expand more easily, service customers more efficiently, and be more flexible with their business decisions.
Many insurance companies are finding legacy systems are a challenge, holding them back from scaling up to adopt flexible and agile operations. Moving forward with new technology removes that barrier, increasing their ability to accommodate their customers’ demands
Increased cost benefits
Customers want their insurance to be cost effective, but they also want to feel like they are receiving quality content and service. Insurtech allows companies to do both – refine their process so that people pay less in premiums but still receive excellent service. Insurance companies benefit from increased business when providing meaningful products and services to their customers with cost savings.
Future proof business
The digital world is continuing to evolve and insurance companies that embrace the technology trends of today will be ahead of their competitors in the future. Delivering experiences customers expect in today’s modern world drives further investment in innovative technology developments.
Take advantage of our experience in digital solutions; call the experts at INTELLIWORX and stay ahead of the insurance technology trends.