Advanced insurance technologies for companies and insureds are now an important part of the property and casualty sector. Insurance quotes can be as simple as a tap, policies can normally be managed by a smartphone app, and physical insurance cards have largely been passed over. The rate of change in the P&C insurance industry drives digital insurance offers and an established omnichannel approach to client service. Moreover, all types and sizes of insurance providers look for perennial options. To remain ahead of the competition, they need technologies that can scale and upgrade with increasing requirements and abilities.
Although some of these methods are still in use by some carriers, we expect them to become more widely used in the future. Insurers looking for a strategic advantage should consider adopting one or more of the new insurance technology developments mentioned below:
1) Analytics that predict customer behavior
Many insurers use predictive analytics to gather a range of data in order to better interpret and forecast customer behavior. Insurance firms will be able to use predictive modelling for the following purposes in 2021:
- Pricing and risk assessment
- Identifying consumers who are at risk of being canceled
- Detecting the possibility of fraud
- Triaging claims
- Recognizing claims that are outliers
- Predicting trend patterns
According to a report by Valen Analytics, firms that used analytics and predictive models, improved their loss ratios by 3% to 9% more than those that didn’t. They also found that insurers who used predictive analytics had a 53% increase in direct written premiums, compared to an 18% increase in the industry during the same time span.
2) Artificial Intelligence (AI)
Artificial intelligence (AI) has grown in popularity in recent years, with AI-enabled gadgets being ubiquitous in homes all over the world. Consumers want customized experiences, particularly when buying anything as significant as property and casualty insurance company. AI allows insurers to build these one-of-a-kind experiences, satisfying the rising demands of new customers. The secret is to use AI’s resources to tap into the vast quantities of user data available, to construct customized interactions based on a person’s preferences and behaviors.
Insurers may also use AI to increase claim recovery rates and radically alter the underwriting process. AI also allows insurers to view data more quickly, and eliminating the human factor will result in more reliable reports in less time.
The initial effect of AI would be focused on increasing efficiencies and automating customer-facing underwriting and claims procedures. It would have a greater effect over time as it will detect, analyze, and underwrite new risks as well as identify potential revenue opportunities.
3) Machine Learning
Not only can machine learning boost claim processing, but it can even simplify it. When data are digital and available via the cloud, pre-programmed algorithms can be used to interpret them, improving processing speed and accuracy. This can be applied to more than just claims; it can also manage policies and measure risk.
According to SMA poll, 66 percent of P&C insurance executives believe machine learning has a high impact potential for commercial lines and 53 percent believe it has a high impact potential for personal lines.
4) Internet of Things (IoT)
The majority of people are able to share more personal information in exchange for lower insurance premiums, and the Internet of Things (IoT) will automate most of this data sharing. Insurers may use data from IoT products like smart home parts, car sensors, and wearable technology to help assess prices, mitigate risk, and even avoid losses from occurring in the first place.
With first-hand results, IoT will strengthen other insurance technologies, enhancing risk management accuracy, allowing insureds the leverage to personally influence product prices, and insurers the ability to increase accuracy and profits.
Insurtech firms use cutting-edge insurance technology to lower premiums for both consumers and insurers, increase operational performance, and enhance the overall consumer experience.
6) Blockchain Data
To begin, what exactly is blockchain data? It is a distributed, peer-to-peer ledger of documents called blocks that is nearly incorruptible, according to Forbes. Any block has a time and date stamp, as well as a connection to the previous block. It is self-managed and does not need the assistance of a third party. Bitcoin and other cryptocurrencies are the examples of Blockchain data
While blockchain is still in its inception as an insurance technology, insurers will be smart to get ahead of the curve. Experts say it would have an effect on:
- Detection and avoidance of fraud
- Increased efficiency
- Consumer trust
- Enhanced processing of claims
7) Social Media
Beyond publicity campaigns and clever commercials, social media’s position in the insurance industry is changing. P&C insurers are enhancing risk assessment, bolstering fraud prevention tools, and allowing brand new consumer services through mining social media data.
Social media data mining enhances
- The risk management for P&C insurers
- Strengthen the capability for fraud identification
- Enable completely new consumer interactions.
Telematics capabilities will continue to affect automotive policies. For both insurers and insurances, the advantages of telematics are various.
P&C Insurance Telematics is going to:
- Foster better driving practices
- Lower insurance premiums
- Switch from reactive to constructive business to consumer contact
Chatbots can work easily with clients, save time for everyone inside an enterprise, and potentially save money to insurance businesses by using AI and machine learning. A bot may apply for policy or claims process to a customer who reserves the right to intervene in more complex cases.
P&C operators are constantly looking for the newest and most advanced insurance technology advancements. It not only lets them keep ahead of their competitors, but also provides consumers with experiences in today’s industry. The year 2021 is a very fascinating year to look at advances in insurance technology, as everything from intelligent home technologies to insurtechs to microservices has gone on to the market in recent years.