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 in penetration and distribution in existing markets.
Entering new markets and expanding existing ones have become major areas of interest in the insurance industry. 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 in insurance
Advances in artificial intelligence are allowing incumbents to automate increasingly complicated tasks like 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 personalised 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 promotes transparency
Blockchain technology is capable of driving a radical change in the insurance industry while increasing transparency and outcome across the entire value chain.
There are several challenges in the 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 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 monetise large amounts of data, in turn, saving a significant amount of time.
Customers have more advanced and complex needs and are aware of their choices. They want personalised services and tailored communications – that’s the reason insurers must digitise services and optimise all interactions. According to the Global Consumer Insurance Survey 80 per cent of customers are willing to use digital and remote channel options for different tasks and transactions.
RPA for claim 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, 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 smoothen the functioning of the system.
Internal workflow automation
Insurers are leveraging technology to automate repetitive tasks generally associated with extracting or putting data into the back-end system. Software robots 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.
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 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.
The author is CEO and MD, EPOCH Insurance Brokers