How technology is driving innovation in the insurance industry

Technology has transformed every facet of the world we live in and is arguably the single largest force, changing human needs and the nature of business. Needless to say, the Insurance industry is no exception here.

Of late, technology is driving innovation in the insurance sector leading to several milestones. The giant insurance leaders have started shifting towards the latest innovative technologies that will help them to become more customer-centric and create operational excellence.

Some of the major technology-based innovations in the insurance industry are

Increase penetration and distribution in existing markets

Entering new markets and expanding in existing ones is an area of major interest within the insurance industry globally. Successful business strategies for insurers entering or growing in emerging markets involves a high growth rate, increased size and more emphasis on life insurance and now it can be easily done with the help of technology.

AI and IoT

Advances in artificial intelligence are allowing incumbents to automate increasingly complicated tasks, including addressing all forms of customer queries. The development of AI in insurance is not only speeding up the time it takes for a customer to buy a policy or settle a claim, but it is also taking historical and behavioral data such as a driving record and create more personalized packages. Also, for insurers with more mature technology capabilities, a suite of Internet of Things (IoT) technologies can help reduce manual interventions in claims and pricing.

Blockchain promoting transparency

Blockchain technology is capable to drive radical change in the insurance industry while increasing transparency and outcomes across the entire value chain.

There are several challenges in an insurance industry such as complex compliance issues, limited growth in mature markets, third-party payment transactions, fraudulent claims activity and handling huge amounts of data. Leveraging the Blockchain technology can give visibility to the data, thus, making the process transparent and secure. It can easily remove suspicious and duplicate transactions by logging each transaction. Also, it can properly manage, share and monetize large amounts of data, in turn, saving a significant amount of time.

Customer expectation

Customers have more advanced and complex needs and are more aware of their choices than ever before. They want personalized service and tailored communications – that’s the reason insurers must digitize services and optimize all interactions. According to the Global Consumer Insurance Survey, 80% of Customers are willing to use digital and remote channel options for different tasks and transactions.

RPA– for claim management and data management

Robotic Process Automation (RPA) automates the mundane routine workflow of the Insurance Industry. Therefore, it reduces the workload and cost of operations and improves customer satisfaction. It also reduces the claims processes by automating the data collection process.

Also, when it comes to Manual data collection and entry, it is a difficult task and could lead to inconsistencies and errors in data management. RPA simplifies the data management process at great speed.

Technology at its peak

Some more technologies such as Cloud computing, advanced analytics, the global positioning system (GPS), telematics, digital platforms, and drones, are providing new ways to measure and control the risk, connect with consumers, and broaden insurability. They are also enabling the production of new insurance services, products, and business models.

Through Technology we can smooth the functioning of the following systems:

Internal workflow automation

Insurers are leveraging technology to automate repetitive tasks generally associated with getting data from a back-end system or putting data into a back-end system. With its help, software robots that can be invoked at various points within the overall business process to eliminate repetitive work performed by people. The result is massive automation and enhanced visibility into the overall business procedure.

Hassle-free insurance

From buying a policy to raising a claim, the procedure is time-consuming and paper-intensive. Addressing these concerns, one can leverage technology to make the customer experience very smooth and hassle-free. Thus, it will reduce the liability of the insurer and the benefit can be passed on to the customers through lower premiums.

Telematics insurance

Telematics is one of the digital innovations bound to have a drastic impact on the insurance industry. With its assistance, insurers can increase their frequency of customer interaction to provide extra services, and strengthen their profitability through specialization. Assessing risk and calculating renewal premium costs can also be done through telematics.

Chatbots for insurance

Today generally cognitive computing or chatbots are being used for insurance. They can be incredibly powerful, augmenting human interaction and decreasing turnaround time on processes. Most chatbots are used to answer frequently asked questions and to solve customer’s queries instantly.

By Pankaj Chauhan, CEO and MD, EPOCH Insurance Brokers