Most industries worldwide are witnessing a transformation, thanks to disruptive technologies. And the insurance industry is no different. With insurtech maturing with every passing year, to stay ahead in the game, insurance companies are always on the lookout for the latest and most innovative technologies that can help them optimize and streamline operations yet give them a competitive advantage in terms of cost and more.
With a lot of radical technologies available today, here are top technology trends in the insurance industry that companies need to adopt if they want to stay on top of their game.
Predictive analytics is widely used in the insurance industry today to help collect various dimensions of data and predict customer behavior. A recent study proved that predictive models help insurance companies to insurance companies to improve their loss ratio 3-9%. In 2021 and beyond, insurance companies can use predictive analytics for:
- Pricing and risk selection
- Identifying customers at risk of cancellation
- Identifying risk of fraud
- Triaging claims
- Identifying outlier claims
- Anticipating trends
Artificial Intelligence & Machine Learning
AI offers insurers the ability to create unique personalized experiences, meeting the high-speed demands of modern consumers. With the massive amount of data collected, AI can help to leverage it to create personalized experiences based on an individual’s behavior and habits. Employing AI also ensure that data can be accessed faster and ensure better and accurate reporting as well.
An extension of AI, ML, in addition to improving claims processing, it can automate it. When files are digital and accessible via the cloud, they can be analyzed using pre-programmed algorithms, improving processing speed and accuracy. Automated review of claims can translate to better policy administration and risk assessment.
Internet of Things (IoT)
Most consumers are willing to share extra personal information if it means saving money on their insurance policies – and the Internet of Things (IoT) can automate much of that data sharing. Insurers can use data from IoT devices such as the various components of smart homes, automobile sensors, and wearable technologies to better determine rates, mitigate risk, and even prevent losses in the first place.
The biggest advantage of latest insurance technologies is that can ensure significant cost savings for both customers and insurers. In addition to that it also positively impacts operational efficiency and the entire customer experience.
Still, in its infancy, blockchain as an insurance technology is seeing a lot of momentum and potential, with several large companies adopting it. Blockchain is a highly capable technology for insurers to stay ahead in the game. It is believed that blockchain can impact consumer trust, enhance operational efficiency, improve claim processing and help in better fraud detection and prevention.
Social Media Data
Who would have predicted the potential role of social media in the insurance industry?
Beyond branding and marketing, insurance companies can employ social media for critical data mining. This can help is improving risk assessment for P&C insurers, bolstering fraud detection capabilities (with the red flags identified), and enhancing customer experiences.
Moreover, it can also be used to investigate fraud. Insurance companies can look at the social activity of insureds and compare it to claims records, looking for any discrepancies.
Auto policies will continue to be impacted by telematics capabilities. In insurance technology, think of telematics as wearable technology for your car. The benefits of telematics are numerous for both insurers and insureds. Telematics in P&C insurance can encourage better driving habits and reduce the claim costs, in addition to many other benefits.
It is estimated that by 2025 95% of all customer interactions will be powered by chatbots.
Chatbots can interact with customers seamlessly, resulting in cost and time savings. They can effectively walk a customer through routine procedures like a policy application or claims process, reserving human intervention for more complex cases.
Insurers today need to be able to manage software platforms, deploy updates, and get to market with new products efficiently and accurately. While this process used to require a skilled developer or IT team, new advances in software-specific coding platforms have made this process easier than ever before.
Adopting these trends, insurance companies can ensure that they retain a competitive edge in terms of operational efficiency as well as cost savings.