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As with every other industry, the insurance industry is resilient and looking for new ways to grow and fight the turbulence in the global economy. There are numerous challenges that can be overcome with the right kind of technology in place.
They are becoming far more technologically advanced with every passing day. Even if the digital transformation is slow, it is visible. Businesses are trying to shift their legacy systems and have become focused on providing better ways to engage with their customers.
Recently, Gartner had published the Top 10 Trends Impacting Infrastructure and Operations for 2020. Let us now take a look at the top 5 technology trends in the Insurance space.
Five Emerging Technology Trends in Insurance for 2020
The needs and demands of customers today have shifted drastically and will continue to evolve. They are now seeking personalized services as against just an off-the-shelf solution. Today, quite a few insurance companies are reeling under a lack of organized distribution channels.
By adopting a new style of functioning and taking on digital insurance sales solutions, insurance enterprises can minimize costs and offer personalized solutions to their customers. The platforms can understand the customer’s preferences, offer quotes, compare between policies before making a final set of recommendations.
This also gives the customer the power to make informed decisions. It is how companies will ensure the customer has a good experience, gain their trust and retain customers in the long run.
AI, ML, and Robotic Process Automation (RPA) will soon take the center stage. These technologies offer better, faster and efficient data capture and processing capabilities. While RPA and AI ensure the chances of fraud and inaccuracy in data is low to nil, they also eliminate the heavy paperwork, documentation aspect of things.
Similarly, when we talk about filing and processing insurance claims, the virtual assistants can answer any customer queries while others will capture relevant data ensuring the process is completed within a short period. This is sure to be one of the technology trends that catch on fast.
A McKinsey study has shown that using RPA in data processing reduces the time spent on the process by 34%. The study has also revealed there is potential to automate 50-70% of current tasks at an insurance company which constitutes about 60% of an employee’s job daily. While it is true that automation works best in repetitive tasks, it facilitates the management to focus on other aspects of the business and introduce innovation across products and services.
Automation will impact and improve business outcomes concerning sales, insurer and customer experience, optimization of cost & resources apart from helping the enterprise stay ahead of their competition.
Finding a company that offers solutions that will boost your business is a good concept to follow. Insurance companies are no different. To meet the increasing demands, insurance enterprises should partner with companies that offer products & services that match their thought process.
It could either be acquiring technology or partner with a company for its capabilities. It would lead to newer business models and revenue streams with enhanced customer experience through these value-added solutions.
For example, Neutrinos has joined hands with IBM cloud solutions to rapidly scale up and increase efficiency. With the IBM stack of capabilities, the IBM cloud Pak, and AS400 modernization expertise, Neutrinos leverages its low-code & multi-experience development platform to offer a better experience to customers and insurers.
While the insurance & banking industries have embraced the concept of Blockchain, there are still a few out there who are treading lightly. Blockchain technology, one of the emerging technology trends, will help insurance companies overcome several current challenges. One of the key features of Blockchain is it can eliminate duplicate or fraudulent transactions with real-time data capture.
Similarly, with its decentralized digital repository, the authenticity of customers is verified, along with policies and transactions. Blockchain can also handle any third-party transactions and claims made online. Blockchain helps control and reduce costs across operations and administration through the automation system in place.
Telematics, the devices that merge information and technology is revolutionizing the insurance sector. Auto insurance companies use telematics to obtain information related to the driver/policyholder in real-time. Some of the common use cases are observing the driver behavior, the car condition, and the mileage.
Based on these data, a risk profile is calculated and a policy is suggested. The only challenge here is to get the customer to understand the concept and agree to install the device in their vehicle thereby agreeing to share real-time data.
Few types of insurance that telematics will give rise to are usage-based insurance (UBI), pay-as-you-drive (PAYD), and pay-how-you-drive (PHYD). Such a level of personalization and smart use of data- will benefit both insurers and customers.
Safe drivers are rewarded, while the insurer can accurately price products for unsafe drivers. Essentially, telematics insurance can influence driving habits positively by analyzing driving patterns and making suggestions on how a driver can do better.
The above-listed technology trends indicate that the insurance industry is in for a long uphill road ahead, but one that promises them big rewards if they embrace these changes. The bottom line is to understand how and when to tap into the new trends and leverage the existing technologies.
If you want to learn about any of these technology trends or want to transform your business, get in touch with us.