The utilization of technology to improve or revolutionise the insurance industry is clearlty evident through the rise of insurtech. Why insurtech? The growth of these companies seeks to provide improved and more efficient, tailored, modernized, and streamlined insurance service and products for its customers.
Key Insurtech Innovations:
- Artificial Intelligence (AI) and Machine Learning:
- Underwriting: AI algorithms are able to scrutinise a vast amount of data in order to determine certain risk elements with precision, making one more basic underwriting requirement to be more accurate, leading towards the underwriting of more efficient and faster transactions.
- Fraud Detection: Massive analytics of data is required to control and flag fraudulent claims and ai has proven to be effective at automating such processes.
- Customer Service: With the ever-changing landscape, the introduction of AI has helped facilitate 24/7 chat support bots that can assist with answers that policy queries or evergreen inquiries.
- Blockchain Technology:
- Transparency and Security: A major problem across the insurance sector hence the attraction towards blockchain is that it has been able to enhance security and transparency across all insurace dominated usecases by providing credible timestamps that can no be altered.
- Smart Contracts: One may argue Smart contracts are able to simplify the automatic progression or finalisation of steps such as claims and premium obligations.
- Internet of Things (IoT):
- Telematics: As new tech emerge, IoT devices for tracking cars will enable new and advanced insurance coverage models that will charge on the basis of usage.
- Wearables: Device worn on a persons body or clothing that can monitor the wearer’s data including health and factors that affect their wellness and enable tailored pricing of insurance policies.
- Big Data Analytics:
- Risk Assessment: Greater datasets analysis assists insurance companies in understanding the risk factors present and pricing insurance appropriately.
- Customer Segmentation: Data analytics allows insurance company’s to target client’s specific risk types and offer products and services that suit them.
Impact of Insurtech on the Insurance Industry:
- Increased Competition: New comers into the market require the current players to rethink and diversify their products and service which in turn fosters competition.
- Improved Customer Experience: Organizations that are technologically propelled invest largely in making the clients experience with them convenient and easy.
- New Product Development: Insurance policies that allow clients to tailor the level of insurance cover they want are, pay-go policies and insurances that activate upon request.
- Enhanced Efficiency: New technologies enable companies to automate certain tasks leading to reduced operational costs.
The Future of Insurance
There is going to be rise of synergistic efforts between Insurtech and traditional insurance companies, Insurers will have to shift the focus to improving technology usage in the life insurance agency to survive in the future. New market perspectives, oriented towards a customer, will allow the insurance business to prosper and develop faster than now.
Disclaimer: This article explains matters at a general level and should not be construed as investing advice. Before taking any specific or concrete investment decision, an independent financial advisor should be consulted.