Technology Is Changing Insurance for The Better
Several changes are reshaping the insurance business, and forward-looking safety net providers aren’t simply watching it occur. They are making a move and making ventures that will enable them to turn out to be more client driven, improve their valuing and make operational efficiencies.
The times of clients getting an insurance agency all of a sudden and getting a statement via telephone are blurring quick. Clients today are advanced locals and need the best rates from each safety net provider out there at the tap of only a couple of snaps. In the event that they can do as such while never dialing a telephone number, all the better.
Insurers are well aware of this and are rapidly investing millions in new startups and platforms that are already changing the industry for the better. Bye bye, mountains of paperwork. Technology’s impact on the insurance industry isn’t simply taking the headache out of the buying algorithm for customers, it’s also saving us money. (Not surprisingly, price is at the top of customers’s concerns when buying insurance.)
Big Data and AI Are Driving the Evolution
Repetition is a standard practice in insurance, and there’s huge potential for artificial intelligence to take on that load of customer inquiries, claims reports and data analysis.
The development of AI in insurance will not only speed up the time it takes for a customer to buy a policy or settle a claim, but will be able to take historical and behavioral data such as a driving record and create more personalized packages. The fewer tasks an insurance company has to hand off to its brokers that can be completed with the assistance of AI, the more savings that can be passed on to the customer.
The development and growth of technology in the industry isn’t a boogeyman that will render the insurance brokers as obsolete middlemen, either. Instead, it’s redefining the role of the broker and broadening their ability to assist the customer. Rather than merely offering up a list of price options, they can now offer more knowledgeable assistance using the data generated by AI to better assess the facts and add more value when dealing with customers.
It’s why so many companies have implemented chatbots into their customer service offerings on their websites. The more knowledge that a broker has regarding a customer’s needs upfront, the quicker and more efficiently they can serve them.
Technology Is Creating a More Secure Customer and Industry
According to the FBI, the total cost of (non-health insurance) fraud each year is a staggering $40 billion. The practice of using AI to spot unusual patterns that could be linked to bogus claims will save the industry (and consumers) millions in the long run. And, you guessed it, it will also speed up the processing of those legitimate claims.
Technology today isn’t just saving consumers more time and money, but is saving lives. Take the teenSMART driving program, for example. The driver-simulation program uses computer-simulated technology to teach inexperienced teen drivers the ways of the road, and those who complete it have 30 percent fewer collisions and are offered lower insurance rates through numerous providers.
As autonomous vehicles cross over from being simply a technological oddity to the norm, the role of insurance will change again with AI will factoring in. Some OEMs are already considering this and building insurance policies into the vehicle purchase. With fewer accidents on the road (fingers crossed) because of self-driving vehicles, premiums will plummet.
Like so many other industries, the rapid advancement of technology is changing how insurance businesses operate and interact with customers. Thankfully, much of it seems to be for the better.
Travys Wilkins, from independent comparison website CompareGuru, says that it’s these small independent start-ups that are harnessing technology like artificial intelligence and machine learning to disrupt the sector and easily grab consumer attention away from the traditional giants in the sector.
5 ways Technology Is Changing Insurance for The Better
Blockchain has been seen to assist companies in detecting fraud, maintain records and essentially save substantial time and labour resources. It ultimately allows you to know your customer and Smart contracts, powered by blockchain technology, for instance, could give both insurers and customers the ability to manage claims in a transparent manner.
The only way for this to work, though, would be for the entire community to work together on a single platform. Many insurance companies, such as those in India and Hong Kong, are now creating a central repository of policyholder data. This allows insurers to avoid having to repeat the registration procedure for multiple policies.
Chatbots have been around for some time now and it’s been a bit of a rollercoaster ride. Deep learning techniques have aided in machine translation which has meant that speech recognition software has improved in leaps and bounds in recent times, thereby further reducing errors.
“The industry is still getting to grips with chatbots and with recent advances in cognitive technology – which helps Chatbots increase accuracy and provide far more relative automated responses – I suspect the uptake will increase even more,” Wilkins says.
At every moment of the day, we face certain risks. Many would agree that it is almost impossible – or at least really expensive – to cover every single thing all the time. Enter On-Demand Insurance. This is the ability to get insurance coverage whenever you want, wherever you want by use of, say, a mobile app.
“On-demand means that the insurance offered is on a need-based model. A simple way to define it is that you only pay for the time that you are at risk,” says Wilkins. “The idea is to offer customised insurance products, with a very limited requirement for the customer to interact with a broker or company representative.”
Devices such as Discovery’s DQ-Track or wearables like Fitbit have given insurers some insight into our behaviour. Other insurers utilise machine learning technology to form smart recommendations on insurance policies, based on your social media. In the future, those offering car insurance will have a far better idea if you drive properly or not. Those offering life insurance will know if you exercise or live a healthy lifestyle. This allows them to adjust their prices accordingly and offer low-risk clients better rates.
Wilkins says that he’s surprised how long it has taken for AI to find its way into the insurance sector. “The industry is essentially built on data, so it seems logical to hand the grunt work such as paperwork and claims verifications over to a really smart computer,” he says.
In many instances, data which has been manually input accounts for over half of the errors. This could be due to typos or incorrect customer details. Through AI and automation, insurers could prevent many of these errors and thereby speed up the entire process for themselves and the customer.
Wilkins says that no industry is exempt from disruption. “Today, the world is always-on, ever-connected and fast-changing. We’re beginning to see a clear shift away from the traditional means in which we’ve always conducted business,” he says. “We’re evolving, and so is insurance.
“The insurance model has remained the same for decades and has predominantly relied on income from policy premiums and asset management in order to function,” says Wilkins.
“Technology has changed that. It has changed the way that consumers think about risks and spend their money. As a result, insurers are now forced to change their model from one that has always been product-centric to one that is more customer-centric.”