Insurance is a highly regulated industry, and the regulator and insurers must approve changes to how insurance companies do business. However, that is not stopping some insurers from experimenting with new technology solutions that could revolutionize their business processes.
The insurance industry is amidst a major technological revolution, with companies using machine learning, drones, telematics, artificial intelligence, and other innovations to develop new products and services. In this article, you will find how insurance companies can use technology to improve customer experience and offer more innovative products and services.
Artificial Intelligence (AI) in the Insurance Industry
AI can automate processes, such as claim processing and underwriting. This can help save a lot of time and money. According to data, using automation for claim processing can help reduce manual work by 80%, reducing the total time required to 50%. In fact, case studies show that using automation can reduce adjudication time by more than 75% and increase productivity by 30%. That's probably the reason why more and more people are adopting automation in insurance.
Another reason for the growth of AI in the insurance industry is increased ROI. According to Automation Anywhere's Now and Next Report, the average RPA ROI achieved by businesses is around 250% within the first six to nine months.
AI can also be used to analyze data, primarily through machine learning. This will help insurance companies better understand their risks and serve their customers. For example, suppose an insurer has many policyholders in a certain area who have made claims due to flooding. In that case, they can use this information to raise premiums or terminate policies in that area.
In addition, AI can improve customer experience by making applications more intuitive and effective at automating tasks requiring human intervention or expertise. Hence, even insurance buyers are demanding the use of AI. According to a recent survey by PwC, 41% of buyers say that they might change their insurance providers because of a lack of digital capabilities like AI.
The Insurance sector is one of the world's most complex and diverse industries. It's made up of various companies, each with unique needs and processes that must be accounted for when managing its operations.
However, technology has made it easier for insurance companies to manage their business. Specifically, the rise of CRM-integrated applications has enabled insurance companies to more efficiently manage customer interactions and data while streamlining their processes. Hence, CRM use is increasing in the insurance industry. In fact, a recent report by GrandsViewResearch shows that Banking, Financial Services, and Insurance (BFSI) accounts for 22% of the global CRM market.
These CRM-integrated solutions have enabled insurance agents to simplify the shift to remote workspaces. With remote work culture becoming the new norm, insurance brokers would not have been able to communicate efficiently with the customers. Modern-day, tech-enabled solutions like Verity Insurance have integrated CRM and other features.
Besides bringing all the customer interactions to a single dashboard, insurance solutions also have additional features, such as reporting, claim administration, task management, document management, etc. While these applications don't directly lead to innovative programs, they can provide insights vital for customizing services and enabling innovative insurance programs.
Blockchain and Insurance Industry
Blockchain is a distributed ledger that offers a way for information to be recorded and shared by a community without any central authority involved in maintaining its records or security.
The technology has already been adopted in many industries outside of insurance, such as healthcare and real estate, but it can also have implications for insurance companies and their customers. For example, blockchain technology could be used to store sensitive data more securely than traditional databases that are managed by insurers today.
Blockchain is also known for being immutable (unchangeable) and transparent because it allows any community member with access rights to view all transactions made on the network at any time.
The technology's transparency makes it easy for regulators to monitor fraudulent activity since each transaction is visible on the network's public ledger - this will enable them with greater oversight over how claims are handled in real-time vs. waiting months until an audit report comes out after an insurer's annual statement closes out a year later.
By streamlining processes and cutting out paperwork, blockchain could save businesses billions of hours and reduce human error.
Wearables in the Insurance Industry
Wearables are personal devices that track health and fitness data, including heart rate, steps taken, calories burned, and sleep quality. Nearly 30% of Americans use wearable health monitoring devices. Also, most of the wearers are willing to share their health information with the care providers for better care.
The use of wearables for monitoring healthcare is expected to increase further. According to Statista, the number of connected wearable devices in use is forecasted to surpass a billion by the end of 2022. As wearable technology continues to evolve, it will enable insurers to offer innovative products that improve customer engagement and increase market share.
Wearable devices are expected to be used widely in health and life insurance policies. For example, using health equipment to monitor heart rate or weight can encourage customers to exercise more in exchange for lower prices or prizes for meeting specified goals.
Besides the raw data, insights generated by analyzing data collected from wearables can also help with better risk management. With more information about each customer, underwriters can make a more accurate risk assessment.
Insurance companies can also create personalized plans with the help of wearables data. For example, collecting data with wearables can allow companies to create user personas based on demographics and health information. This can enable them to make better plans for individuals residing in a specific location or age group.
Telematics Technology for Auto Insurance
Telematics is a data-driven approach to insurance. It allows the insurer to receive real-time information about a vehicle's location, speed and distance traveled, and braking patterns or acceleration. This information can be used to improve risk assessment and claims management.
Businesses are increasingly embracing telematics across the globe. The size of the automotive telematics market is expected to be worth $441.5 billion by 2030.
Telematics can also help insurers identify fraudulent claims by comparing data from multiple vehicle sensors with the driver's account history and policy details. In addition, telematics devices can detect accidents before they happen through motion sensors, which then alert drivers if they're about to hit something or someone else on the road.
In conclusion, it can be seen that insurance companies are becoming more innovative and creative with their products. This is a good thing because it encourages competition and keeps customers happy. As the market continues to evolve, it is expected that even more exciting innovations will come in the future.