InsurTech is a buzzword nowadays where a variety of technologies are set to transform the traditional insurance industry. Many Insurers have already transformed themselves digitally to offer convenience, security, choice, and comparison to their customers.
Internet of Things (IoT), telematics, drones, the blockchain, smart contracts, and artificial intelligence (AI) are providing new ways to measure, control, and price risk, engage with customers, reduce cost, improve efficiency and increase customer experience.
Here are five ways Insurers can stay ahead in the market and successfully fulfill high customer expectations.
1. Lower Insurance rates:
– Fitness apps or wearable devices:
Getting fit has many perks. Some of the fitness apps like Wysa and wearable devices help you maintain your weight, food habits, boost your energy and mood. And most importantly they can help you save a huge amount of your health insurance cost. Various insurance providers are tapping into wearable devices to keep updating their customers to stay in shape and healthy and offering them many discounts and benefits if customers meet a required fitness goals.
– Self Driving car:
Self Driving cars will one day lower life insurance rates. Since road deaths are a significant percentage of deaths in the entire world, any slight downward change will ultimately lead to lower deaths and hence life insurance claims.
2. Fraud Prevention:
Fraud comes in all shapes and sizes. Insurance fraud costs companies billions of dollars per year across the globe. Insurance companies should establish a technology framework, tap into advanced automation and analytics, and take steps to prevent it.
– Digital Signature Technology:
Digital signature technology is without a doubt lowering fake insurance account activation and hence a fraud. for example, the case of claims on a said date when insurance is purchased after accident can be brought down with digital signatures verifying the purchase to be after the incident.
– Data analytics:
The technology involves data mining tools and quantitive analysis. Data analytics can be applied to detect fraud. Predictive analytics helps improve the fraud detection process, helping prevent claims payouts. Analytics on claims and fraud transactions helps enhance risk management
3. Lower underwriting cost:
The number of internet-connected devices and sensors is projected to reach 50 billion by 2020, which will have a significant impact on the availability of real-time information that insurers can use for better pricing/underwriting. Drones are satellites on steroids at least as far as underwriting is concerned. Satellites have dramatically changed how home insurance policies are written due to fire. All sorts of things to come from drone footage underwriting: Houses that you can’t even see due to trees.
4. Billing efficiency:
Billing systems are not only integrated but now can accept varied forms of payments allowing ultimate flexibility to the customer and thereby making the billing systems efficient. The automated systems can inform and remind customers of approaching due dates for premiums thereby lowering unintentional defaults.
5. Specialized insurance:
Each type of insurance is different from the other and the factors that are suited to one are not suited to the other. This requires the insurance agents to have specialized knowledge and the internet helps. however, Machine learning is vitally important here. It has the capability to learn and analyze billions of patterns and identify suitable underwriting clauses as well as identify specific customised plans for the customers based on the data provided. This can change the customer perception of the insurance company and provide an engaged customer who is likely to stay longer.
Emerging technologies have produced various opportunities for Insurers to walk with today’s world, provide seamless customer experience to their customers and create new services and products.