If someone told you that you no longer need to endure a tedious claim filing process if your car has met with an accident, what will be your reaction? Odds are that you will be incredulous and doubtful. However, this is now becoming a reality in the insurance sector. Insurance is one of the sectors where technology has started penetrating deeply. Insurtech refers to the use of new technological innovations in the insurance industry that is enabling the insurance process and making it cost-effective and efficient.
Artificial intelligence (AI), Big Data, Machine learning (ML) and Internet of Things (IoT) are some of the technologies that are fuelling the insurtech space. Artificial intelligence is simply human-like intelligence given to the machines. Chatbots, insurance comparison platforms, quote generators are are leveraging AI to better service their customers by providing customised insurance premiums and 24 assistance, a month other things. You can now compare insurances, identify needs, and get help for any insurance within a few seconds. Machine learning is the part of artificial intelligence which consists of self-learning algorithms. Assume that your car gets a dent that is 10 mm wide and 20 mm long. Basis the length of the dent, the insurance company decides to make a settlement of Rs. 10,000. Over a period of time, thousands of such data points will be incorporated into the machine learning process. The next time when you dent your car, you can simply take a picture of the dent and send it to your insurer. The dent will be analysed by the machine which will automatically assess the settlement claim. This process makes claim settlement quick and efficient. Insurance companies are using these technologies to make changes in some of the following areas:
Risk Modelling – Big data is nothing but analysing millions of data points. Data analytics can help insurers manage risk better.
Detecting Frauds – Technologies like machine learning can process different human patterns through data which might not be possible manually.
Claim Processing – As stated earlier, a claim process can be automated to remove intermediaries and get satisfying results for both the company and the client.
Underwriting – Computers are being used to analyse the data given by the applicant and raise red flags if there is a mismatch or inconsistency in data.
Consumers are well-positioned to directly reap the benefits of insurtechs. Taking an example of airline insurance- if you get insurance on your flight for delay or cancellation, the moment it gets delayed or cancelled, you will be paid within an hour or less just because of the interconnectivity of industries. Technology that insurtechs leverage can make various parts of the insurance value chain better by enabling better risk assessment and faster claims settlement.