We will explore the increasing impact of technology on insurance. To understand the truth behind InsurTech, we spoke to experts in the insurance, tech, and financial sectors.
The insurance industry is experiencing a period of extreme change. Insurance companies face increasing customer expectations and a need for better customer service. Technology’s advancement offers an industry real opportunity to adapt the insurer’s business plan to market trends. This will allow them to deliver customer-driven outcomes as well as comply with regulatory requirements. InsurTechs, a new type of technology-led provider that caters to the digital needs and demands of customers and end-users, have entered the insurance industry. InsurTech allows traditional insurance companies to innovate in their operations and approaches to capitalize on the digital transformation.
- We provide all-inclusive services that harness the latest technological advances to ensure a superior customer experience.
- Redesigning the operating model with active participation of technology in order to enter new markets and increase profitability.
Darius Kumana is the Co-Founder and CPO of Wrisk, a UK-based InsurTech offering contents insurance. There are many opportunities to transform the entire value chain: frictionless disclosure, instant MTAs and subscription-based policies rather than annual policies. Automating claims is just one example. There are many technologies that can be used to better assess and communicate personal risks, including novel data sources and sensor information. These technologies include machine learning and AI. It is not easy to make this complex risk landscape understandable and simple for customers.
Wrisk is on a mission change people’s perceptions and purchase insurance. Wrisk believes insurance should be linked to our lives and devices, as well as to us as individuals.
We see key trends in the industry that will allow traditional Insurers to remain competitive and capitalize on their investments in technology.
In this first blog post, we will discuss tech trends including big data, AI, IoT, Blockchain and their impact on hyper-personalization.
Data empowerment. Analytics and big data
The insurance industry’s business differentiation is omnipresent data. It is now a matter for business survival to leverage structured and unstructured data, as well as access to data on-demand by insurers to make sustainable use. Insurers can now focus on the outcomes, thanks to technology. This is to use the accumulated data to help insurers find new customer segments, gain timely insights into customer needs, develop innovative products that combine traditional and preventive services, for faster claims processing and product development. All these are advantages for being competitive.
Emerging technologies can improve customer service in a hyper-personalized world. These include the use of blockchain to identify and transparency, mobile payments that remove barriers to adoption, AI for intelligent data use, and wearables and sensors that allow for a new way of collecting data . All of these tools help in understanding customers at a higher level. Insurance providers have access to a wide range of customer data that allows them to manage risk and tailor products and services to their customers’ needs.
CASE STUDY. InsurTech as a practice
We have created a solution to help an InsurTech customer gain data-driven marketing insight using machine learning algorithms. Sales and marketing teams now have the ability to engage with potential clients at a higher level. They can also use machine learning algorithms to reduce marketing costs and create targeted marketing campaigns. Marketers and sales reps approach potential clients with witty, relevant messaging. This is based on obtaining super-accurate marketing insights into users’ behaviour through advanced Customer Segmentation & Loss Ratio which identifies the “Perfect customer”.
Insurers work hard to be trusted providers so they can sell to customers who are overwhelmed with the many insurance options available. InsurTech uses big data cognitively to find accurate risk predictors, without asking annoying questions. This means that the data’s value is captured, processed, and analyzed in order to improve underwriting, better understand customers, and possibly offer better products and services.
CASE STUDY. InsurTech as it is practiced.
SnapSmileShare data scientists have developed predictive analytics and the recommendation system for insurance companies to help attract new customers and increase insurance sales. The collaborative filtering and applied data mining techniques allow customers to identify the best products and recommend the best insurance plans. This creates personalized user experiences.
Data science and advanced analysis allow insurers to listen to their customers by making sense out of unstructured real time information (social media posts, blogs, videos, etc.). To identify new opportunities. Insurers can retain customers by targeting brokers and customers using deep analytics. This will increase sales productivity and value chain/value proposition. The insurers can also use data analytics to generate revenue by entering new markets and profitable niches.
CASE STUDY. InsurTech as it is practiced.
A comprehensive BI reporting solution paired up with Tableau visualization, backed up by a specially designed warehouse and architecture, allows for real-life analytics to be applied by SnapSmileShare. This is the case for the global leader in on-demand providers. The insurer can seamlessly access all data from different departments and markets. These customized reports allow for instant intelligence-based business decisions and enable monitoring of information across the entire system. What does this all mean? Operational efficiency is high and there are no delays in decision-making.
– Learn more about how SnapSmileShare can help insurance service providers and InsurTech companies to sustain digital innovation for customer engagement, business growth, and customer satisfaction.
AI powered by data is already in place and changing the customer experience in the insurance industry. Startups and tech innovators use machines to help scale analytics across data types, simplify claims payouts, secure data migration, and automate policy administration in increasingly complex situations. Artificial intelligence is key to better customer service.
Large-scale insurance consulting. Artificial intelligence makes personalized insurance solutions possible by providing highly targeted product/policies recommendations. Accenture reports that 74% of customers are ready to receive computer-generated insurance advice. This is making it more popular to deliver better customer experiences 24 hours a day based on customer insight.
Efficient process automation. Modern InsurTechs offer solutions that increase operational efficiency. AI and robotic process automation help to manage large data volumes, validate evidence faster, and are far more accurate. This frees insurers up to focus on core operations and not time-consuming underwriting and claims processing. This reduces the cycle time and ensures better regulatory compliance.
Fraud mitigation. According to statistics, fraudulent claims have a significant impact on the industry’s profits and loss ratio. Every day, 350 cases of insurance fraud are discovered in the UK. Insurers tend to use AI technology to detect suspicious clients faster and to take swifter and more effective action.
Biometrical AI is an important focus for security applications. Image and facial recognition can have the potential to impact claims processing and validation. It is possible to recognize faces and images instantly with 98% accuracy, which can eliminate fraudulent claims and identify suspicious signals.
Internet of things
Smart appliances, fitness wearables, and sensors are all connected devices that use IoT to track policyholders’ driving habits, household issues, and health patterns . Insurers are now using IoT technology to improve the underwriting process, claim management, and ultimately, make customers happy. IoT is a great way to get a real picture of the customer, since it provides accurate, real-time data about policyholders. This means that insurers can better assess risk and manage loss. Customers will also benefit from customized offerings, faster and more effective checkups, as well as simplified processes.
This data can be used to combat fraud and connect medical conditions with accident outcomes.
Augmented Reality (AR)
AR is making a significant impact on the insurance industry by transforming the concept of insurance using computer-generated data. InsurTech AR (including VR and MR) applications allow insurers to engage with their customers interactively. This allows them to explain insurance plans, estimate alleged damages and give risks warnings.
Blockchain technology is a distributed ledger technology that uses advanced cryptographic (learn more about: cryptographic meaning) techniques to secure data. It is thought to be the foundation for new secure offerings in the insurance industry. For easy and secure access to distributed data, the insurers use blockchain. This allows them to increase data accuracy, trust, and reduce transaction costs. Blockchain-based insurance systems are able to modify the claims processing in cases of catastrophic or severe events. It can greatly reduce the time and effort of brokers and insurers processing large volumes of documents provided by claimants, assessors or lawyers, experts, and others. Secure data sharing can be accelerated, making it more efficient and precise.
Customers of insurance are eager to see the sector transform towards these new innovations. This is evident in the almost daily appearance of startups. The future holds a carefully planned scenario that integrates tech into the sector, with close collaboration between technology and insurance providers who speak each other’s languages.