The insurance industry is experiencing a sort of renaissance. With increased technological advances every day, it’s only natural that the insurance industry leverages them. This means that many disruptive trends shaping the insurance industry today make conducting business a lot easier. Whether you’re an insurance provider or a customer, there are a lot of conveniences to be derived from incorporating these trends into business transactions.
These trends include:
1)Predictive Analysis
This mathematical tool has been in play for years now, being very useful in collating crucial consumer data and deciphering specific parameters associated with such data. Insurance companies can utilize predictive analysis for many tasks, including:
i)identifying potential risks for fraud.
ii)analyzing pricing models and risk selection
iii)identifying claims that fall outside normal parameters and their frequency.
These are some of the numerous ways predictive analytics can help insurance companies optimize their information.
2) Artificial Intelligence (AI)
AI is driving innovation in many fields, including the insurance sector. The use of AI-powered tools to facilitate insurance transactions and enhance customer experience. For example, many insurance providers have AI-optimized features on their websites to quicken the processing of customer claims. Also, voice-activated virtual assistants are pervasive, with many insurance companies including such features on their platforms for better customer service.
3) Machine Learning
For those not in the technology industry, the line between machine learning and artificial intelligence can seem blurred. While one is a subset of the other, there are slight differences. Strictly speaking, machine learning is a branch of AI. However, in particular, machine learning is based on the precept of programming machines to act as automatons as far as processing data goes.
Machine learning means insurance providers can utilize pre-programmed algorithms to analyze claims and identify associated risks at vastly improved speeds.7
4) Internet of Things (IoT)
IoT involves the sharing of data for enhanced customer experience and other perks. For instance, many consumers are comfortable sharing personal information and shopping habits if it means favorable insurance policies. The IoT can significantly facilitate and automate such data sharing. In addition to cellphones and personal computers, smart homes and other components like automobile sensors can also provide the needed data for insurance companies to assess better and determine various risks and, in some cases, significantly mitigate them.
5) Blockchain Data
Anyone familiar with the cryptocurrency space will undoubtedly be familiar with “blockchain.” It’s defined as a virtual ledger, peer-to-peer, distributed, and incorruptible record-keeping units called blocks. All blocks link to one another, with each being time-stamped. It is self-managed, thereby obviating the need for a middleman.
Admittedly, blockchain as an insurance tool is still in its infancy. However, insurance providers would do well to gradually adopt this tool as it is set to become invaluable later on. Whether for fraud detection or building more consumer trust, blockchain will have a role to play.
6) Insurtech
Insurtech is the industry jargon for insurance technology companies that utilize the latest technologies to optimize insurance issues for both providers and their customers. While this may seem similar to other such tools available to insurance companies, insurance enhances real-time tools like predictive analysis for enhanced operational efficiency and customer experience.
7) Social Media Data
Social media is now essential to the marketing campaigns of many companies. For insurance companies, it goes beyond glib advertisements. Mining social media data is now essential for improved risk assessment, finding better ways for insurance fraud detection, and facilitating better customer experiences. Such social media data has made it possible for some insurance companies to go fully digital as far as customer interactions go. This means that their platform is optimized to ensure that customers log in remotely, file their insurance claims, and get real-time feedback. The insurance company can also monitor consumer activity for any signs of discrepancies that may hint at fraud and other malpractices.
8) Chatbots
These AI and machine learning tools enable customers to interact with insurance providers in real-time while avoiding the many hassles associated with regular provider-customer interactions. Some sources estimated that chatbots would power most customer interactions within a decade. A good example is when a bot answers some generic questions about an insurance company’s policies or directs them to other online resources when necessary.
9) Telematics
Telematics capabilities are crucial for car insurance providers. They are akin to wearable car technology, helping gather data on things like location, speed, accidents, overspeeding, and things that may indicate reckless driving. These are all crucial data points, helping the insurance company determine your premium based on your predisposition based on the collected data. Telematics encourages better driving habits while promoting reduced claim costs for the providers.
10) Drones
While civilian drones are mostly for enthusiasts and low-level law enforcement, insurance providers can also jump on this trend. For example, many providers are now using unmanned drones for aerial inspections of houses and other properties to help them gather necessary data for setting premiums. In the event of an accident, drones can gather real-time data about the accident scene, thereby helping the provider get some valuable information that can be leveraged later on when a claim is made.
11) Low Code
This trend will enable insurance providers to manage software platforms by making the needed updates for the efficiency and accuracy of marketing their services. While such management requires skilled IT professionals, low-code configuration tools have made it easy for those without a background in computer science and information systems. These tools have a drag and drop functionality, meaning the user can quickly implement different user interface features without hiring IT professionals.
Insurance providers that incorporate many of the above trends in their dealings with customers will reap the most rewards.
