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Five emerging technology trends in the insurance industry for 2020
As with every other industry, insurance industry continues to remain resilient, they are looking for new ways to grow and fight the turbulence in the global economy. There are numerous challenges the market is reeling under, some of which 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 make the shift in their legacy systems and have become focussed on providing new 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.
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 not only the challenges in the market scenario, but also the lack of organized distribution channels.
By adopting a new style of functioning and taking on Digital insurance sales solutions, insurance enterprises will be able to minimize cost, and offer personalized solutions to their customers. The platforms have the ability to understand the customer’s preferences, offer quotes, allow them to compare between policies before making final set of recommendations. This also gives the customer the power to take informed decisions. This 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. For better, faster and efficient data capture, processing capabilities, these elements will become a part of the solutions offered. While RPA and AI ensure the chances of fraud and inaccuracy in data is low to nil, they also eliminate the heavy paper work, documentation aspect of things. Similarly, when we talk about filing and processing insurance claims, the virtual assistants will be able to answer any queries a customer might have, while the others will capture relevant data, ensuring the process is completed within a short span of time. This is sure to be one of the technology trends that catches on fast.
A Mckinsey study has shown that with RPA, there was a 34% time saved for an employee on data processing. 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 on a daily basis. 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 have a major impact and improve business outcomes with reference to 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. In order to meet the increasing demands, insurance enterprises should partner with companies that offer products & services that match with their thought process. It could either be acquiring technology or partner with a company for their capabilities. Which in turn would give rise to newer business models, and revenue streams, apart from 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 on their low code & Multi-experience development platforms to offer 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 of today’s 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, and so is that of the policies and transactions. Similarly, Blockchain can also handle any third-party transactions and claims made online. For an insurance company, Blockchain helps control and reduce costs across operations, including administration through the automation system in place.
Telematics, the devices that merge information and technology is what is slowly but surely revolutionizing the insurance sector. Auto insurance companies use telematics to obtain information related to the driver/policy holder in real time. Some of the common use cases are observing the driver behaviour, the car condition and the mileage. Based on these data, a risk profile is calculated and policy 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 level of personalization and smart use of data- will benefit both insurers and customers. Safer drivers are rewarded and the insurer is able to accurately price products for drivers who are not as safe. Essentially, telematics insurance is able to 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 on the existing technologies.
If you would like to learn about any of these technology trends, or change the way your business can be transformed get in touch with us.