FinTech

Security in InsurTech – Predictions for 2018

The new year is right around the corner and we want to take a look at what will be the future of InsurTech in the coming year. This year 2017 was great for InsureTech with a lot of focus on AI, ML and related technologies trying to make the insurance industry ready for the future. 2018 is going to take this forward.

The insurance industry would be in lockstep with the new technology and as the advances happen in the AI and ML, they would be picked up. Our focus for this article is around security related use cases that will help the insurance industry.

Advances in analytic technology such as Machine learning and AI are crucial in the fight against insurance fraud. To keep pace with sophisticated rings that constantly develop new scams, here are some trends to keep an eye on in 2018.

Ellen Roberson, Director of Insurance Marketing at SAS offering following insights

* Digital Policy Shopping: In 2018, millennials and other generations will continue to use mobile and online channels as a way to shop and service their policies. It’s a boon for convenience as more insurers focus on digitization to align with consumer expectations, but this digitization comes with risks, including an explosion in fraudulent claims.

* Real-time Authentication: Increasingly, authentication won’t just focus on prospects and customers. To prevent data breaches, insurers will increasing apply real-time authentication to everyone logging into their portals throughout the extended ecosystem, including brokers and agents.

* Premium Leakage: Premium leakage is defined as missing or erroneous underwriting information. Personal lines automobile insurers will face at least $29 billion in premium leakage – missing or erroneous underwriting information that undermines their rating plans.

* Health Care Fraud: State and federal authorities have reported increases in fraud, such as identity theft, fraudulent billing and deceptive sales practices.

* Agent Gaming: Premium misappropriation is the most common type of insurance fraud. Insurance agents, especially those who manage one person groups, can have access to vast amounts of their client’s funds. If they are under extreme financial pressures, they often rationalize their actions. Insurers must be vigilant in order to protect their customers and their reputations.

It is going to be an exciting year ahead. Insurance industry is on a path to making itself more technology oriented and reap the benefits of technology even more in the coming year.

Growth of InsurTech in Southeast Asia

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As the economies become digitally empowered, business models are also being updated constantly to keep up with the dynamic customer expectations. Long gone are the days when the customer would worry about pleasing the insurance agents to keep in sync with their policies.

Today, InsurTech is all about digitally empowered insurance businesses and strategies and availability of online insurance solutions to customers. With information available at their fingertips, customers are now, reaping the benefits of multiple options and easy reimbursements with practically no human intervention in a few cases.

After FinTech, InsurTech had been creating a lot of excitement in the Western world. Now, the focus is shifting towards Asia. With a population of over 4.4 Billion, Asia is sure to play a huge role in the trends of growth and development. Singapore and HongKong are already betting on the Tech avatar businesses in insurance.

The Current Phase

According to a report by Ernst and Young, the trends for an InsurTech market in Southeast Asia will keep changing rapidly over the next three-to-five years pertaining to the adoption of changing technologies by businesses. The conventional business roles and models like paper record maintenance and manual verification are expected to be eradicated completely.
With over, 40% of uninsured, the middle class population in Southeast Asia. The scope of penetration for digitally charged insurance businesses through technology mediums like Smartphones is huge.

About The Expected Change

Business startups in the US and UK have attracted a lot of venture capitalists investments in the recent past. As a ripple effect of the same, South Asia also awaits to cash in on the buzz. Since, Asia, is one continent with maximum growing untapped population, the opportunity it represents is also tremendous.

Banks in financial hubs of SouthAsia, Singapore, and HongKong have already received big investments in InsurTech: DBS bank from Manulife of 1.2 Billion dollars, Citibank from AIA group 800 Million dollars and Standard Charted from Prudential (UK) 1.25 Billion dollars.

Singapore and Hongkong are providing a host of development and breeding options like incubators, insurance labs and more for InsurTech startups.

China is also seeking to build up big online platforms to provide various insurance options personal, medical, auto online. Malaysia has already started reaping the benefits of such platforms by slowly reducing the need for live agents.

The business models are completely changing. A lot of eyes are set on India, by financial investors and interested insurance companies for their growth in the world’s largest growth market.

What Does The Future Behold?

With Web becoming the business place for the insurance market, cybersecurity will play a huge role. Until completely secured businesses are established, the maximum potential of a digital business model cannot be accomplished.

Earlier, a lot of traditional businesses could not venture into Asian markets due to the regulatory risks involved. But, now, as power lies in the hands of machines, the business market is expected to explode exponentially.

How Insurance industry is leveraging the Artificial Intelligence

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For more than 100 years Insurance industry has been functioning in very similar fashion but the recent developments in technology and its adoption by the people has made the insurance industry rethink about how it goes about its business.

A study by Mercer identified Technology and Big data as one of the top 6 challenges the industry is facing followed by Industry problems of Growth and Customer Focus issues.

This should not be worrying because the industry can start solving the issues of growth and customer focus using the new technology available now. A specific branch of FinTech has been carved out to cater to insurance. It is called the InsurTech. This class of technology is being specifically focused on Insurance industry use cases.

InsurTech is about leveraging the Artificial Intelligence capabilities that are evolving and working on Big Data available from various sources. One of the biggest use cases involves using Machine Learning algorithms to mine data to get better insights about consumers, their shopping patterns, lifestyle choices from huge data sets that are now available thanks to mobile and web adoption in the world. It can be safely said that innovation starts from looking and analyzing data, and the Insurance Industry is for sure to benefit from doing it.

The individual companies are transforming the way they handle selling insurance to processing and settling claims. Artificial intelligence is being used to completely handle insurance claims, making the whole process faster, in a recent announcement Lemonade insurance demonstrated doing this in mere 3 seconds.

AI can not only help in claims processing, however, can also help in setting prices, modeling the risks associated with insurance, customer acquisition, distribution, and operations. It can solve problems across the whole value chain of the insurance industry. It does not take much to start as well. One recommended approach by MantraLabs is to start with Digital Transformation and in the process start implementing the AI related improvements in the systems and processes.

Mobile Apps, Chatbots, improved Web interfaces are some key elements to improving the customer focus issues highlighted earlier and these can be assisted by AI to provide customised experience to individuals.

In Summary, we can say that AI is already transforming the insurance industry and it’s here to stay

Insurance sector is getting renovated with these technologies

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After the entry of technologies in finance sector – FinTech. Insurance sector is ready to make a buzz about it. The term – InsurTech, a combination of words insurance and technology, as a segment is sure to gain the attention of innovators in the coming years.

Artificial Intelligence, Machine Learning and Blockchain technologies will be the hottest technologies to watch in insurance sector. All these technology interventions are helping the insurance sector to offer customer-oriented solutions managing price, risk, cost and customization.

According to the report Insurtech to take home 86 million policies by 2022. (https://www.enterpriseinnovation.net/article/insurtech-take-home-86-million-policies-2022-1956640660.

Insurance sectors are increasingly investing in latest technologies in order to improve their customer experience. The investment in AI applications has increased from $4.0 billion(2015) to $5.0 billion(2016).

Let’s take a look on benefits and use case of these technologies.

Artificial Intelligence/Machine Learning:

AI/ML can help tremendously in insurance sector with payment of premiums and claims, insurance has much to do in terms of customer engagement.

Use cases of AI/ML

  1. Claim management : Claims management can be augmented using machine learning techniques in different stages of the claim handling process. By leveraging AI and handling massive amounts of data in a short time, insurers can reduce the overall processing time.
  2. Marketing and Customer experience: Improving the customer experience by using customer data, usage and demographics.
  3. Telematics: Telematics that helps in gathering the history of speed, turning and braking patterns, distance, time of day and many such things could assist in judging drivers are driving capability and issue an insurance policy accordingly.

Blockchain:

Blockchain/Bitcoin has the great potential to bring the revolution in finance and insurance industry. Blockchain is going to change the way that data is processed and the way investments are handled.

The potential use cases of blockchain, i.e. Distributed Ledger Technology (‘DLT’), anonymised processing, immutable, encryption.

1 . Decentralized cloud storage across the network.

2. HR Management – Resume Authentication for job hunters. Background verification without using third party consultancies.

3. Supply Chain Management & Transparency – Banks and insurers can create performance management programs to increase engagement

4. Vehicle Leasing system – Complex vehicle supply chain management can be done using Blockchain and smart contracts

Takeaway:

Let’s take this opportunity to explore new dimensions of the business and let robotics take the command. Its time to say good – bye to the age- old processes and welcome to the whole new world of technologies in insurance.

Business Applications of Blockchain

What is Blockchain:

A distributed ledger – It tracks ownerships through historical assets and identities – and everyone has a copy.
Unique Tokens – long numbers are tracked through the ledger
Anonymized Processing / Mining – transactions are processed through miners.
Immutable, encrypted, pseudo anon – and they are immutable once they’ve happened, and are encrypted.
Consensus Mechanisms – as long as 51% of the network agree, it holds.

Is The Blockchain a New Web 3.0?

The blockchain gives internet users the ability to create value. It may revolutionize the future and a couple of places it is making a difference today.

12 potential business applications are listed down for blockchain.

Smart ContractsDistributed ledgers enable the coding of simple contracts that will execute once the specific conditions are met.
The Sharing Economy – By enabling peer-to-peer payments, blockchain opens the door to direct interaction between parties – a truly sharing economy results.

CrowdFundingBlockchain takes this interest to the next level, potentially creating crowd-sourced venture capital funds.

GovernanceBy making the results fully transparent and publicly accessible, distributed database technology could bring full transparency to elections or any other kind of poll taking. Ethereum-based smart contracts help to automate the process.

Supply chain auditing – Distributed ledgers provide an easy way to certify that the backstories of the things we buy are genuine. Transparency comes with blockchain-based timestamping of a date location.

File Storage – Decentralized file storage on the internet brings clear benefits. Distributing data throughout the network protects files from getting hacked or lost.

Protection of Intellectual Property – Smart contracts can protect copyright and automate the sale of creative works online, eliminate the risk of copying and redistribution.

Internet of Things (IoT) Smart contracts make the automation of remote systems management possible. A combination of software, sensors, and the network facilitate an exchange of data between objects and mechanisms.

Identity Management – Distributed ledgers offer enhanced methods for proving who you are. Having secured identity will also be important for online interactions – for instance, in the sharing economy.

Data Management – In the future, users will have the ability to manage and sell the data their online activity generates. Because it can be easily distributed in small fractional amounts, Bitcoin – or something like that.

Land title registration – AsPublicly-accessible ledgers, blockchain can make all kinds of record-keeping more efficient. Property titles are a case in point. They tend to be susceptible to fraud, as well as costly and labor-intensive to administer.

Stock Trading When executed peer-to-peer, trade confirmations become almost instantaneous. This means intermediaries – such as the auditors, and custodians – get removed from the process.

What Problems does Blockchain solve?
Removal of the Middlemen to make system decentralized. There is no, a single entity that controls the network, Instead, it’s analogically similar to BitTorrent. Own your own data in the new Data Economy.

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The Central Point of Failure – Reliability on the Central Server containing all the data is less in case of Hacker’s attack on the server, Blockchain Technology makes us move towards a permanent web. A web where links never die. Stupid 404 !!!

Establishing Transparency, to make system Trustless. In other words, no need to put the trust on the peers, as the designed system is highly tamper-resistance.

Faster Data Transfer – A peer-to-peer network helps the transfer of data super fast as compared to the central server serving data.

In general, Blockchain is creating a world with more and more value. It can be applied to any need for a trustworthy system of record.

What is Blockchain Technology?

“Bitcoin is just one example of something that uses a blockchain. Cryptocurrencies are just one example of decentralized technologies. And now that the Internet is big enough and diverse enough, I think we will see different flavors of decentralized technologies and blockchains. I think decentralized networks will be the next huge wave in technology. The blockchain allows our smart devices to speak to each other better and faster.” Melanie Swan, author of Blockchain: Blueprint for a New Economy by Swan, Melanie (2015) Paperback

Blockchain is now making the biggest revolution in the finance industry. As a technologist, we should evaluate and apply the concept of Blockchain without thinking Cryptocurrency. It can unveil many possibilities and can lead to innovations. Cryptocurrency is becoming a distraction to the possibilities of blockchain as people have started using terminologies vice-versa.

What is blockchain technology and why it is safe?

Blockchain provides a protocol for building a shared, replicated and distributed online ledger network. Each participant in this blockchain network maintains their own copy of that database, or collection of organized information.

If you simply put,  blockchain is made up of a series of blocks of data that are securely tied together. Since all records are connected to each other, they are entrenched. It is impossible to modify or alter a previous record without changing the copy of every participant in the blockchain.

There are some disruptions too!

Contracts, transactions, and ledger are the defining structures which set the boundaries of our economic, legal and political systems. Today these involve people and corruption. With blockchain, contracts can be embedded in digital codes, stored in shared databases, protected from tampering.

Blockchain may be disruptive, but the question is if it’s too disruptive for its own good.

Although blockchain is one of the hottest and intriguing technologies currently in the market but it comes with its own challenges. Many business leaders and industrialists are skeptical about blockchain.

Let’s see what are those skeptics:

  • It will be hard for established business in the industry where blockchain will push uncomfortable transparency which can lead to price corrections and change in business models. It can be so much disruption that it can lead to the foundation of new technologies.
  • Adoption problem of Blockchain technology
  • Time-consuming: Blockchain-based transactions can only complete when all parties update their respective ledgers – which is a very time-consuming process.

Eight reasons to be skeptical about blockchain.

InsurTech: Present and Future of Insurance Technology

Insurers need to spin the technology that offers their customers with more efficient, optimized and relevant policies. The ones that could be customized could be fed with data from a wearable/mobile device or the ones that are applicable for just an hour. With such customer focus initiatives, they yet need to achieve core business objectives like price and operational efficiency and compliance to stringent regulations. Could the Insurtech meet up the expectations? Could technology lend a helping hand? Let’s explore how the insurance vertical is evolving with the latest technology and what its future is –

The Present of InsurTech

The insurance firms are under immense pressure of reorganizing their house – customized policies, risk mitigation strategies, real-time analytics, instant claim settlement, sensors, drones and augmented reality (AR) apps are playing a significant role. So, what are the technologies adopted by the firms? Let’s take a closer look –

Robo-Advisory Services

Robo-Advisors have seen a broad adoption across insurance sectors. Unlike olden days when hiring a financial advisor was a dream for many individuals, with Robo-advisors people of the low-income group could use DIY advisory for their financial portfolio. Should you opt for all critical disease cover or only a few? Should buying an integrated policy be beneficial or an individual one is some of the questions that could be answered via Robo-Advisory Services.

Policies via Sensors, Detectors, and Telematics

Sensors, Detectors connected via the internet could send early signals of smoke/radiations to the rescue services, helping in minimizing the damages. Also, Telematics like monitoring automobile speed, the behavior of a rash driver could assist in making a clear judgment of claim policies for individuals and insurance firm. Hence while IoTs and interconnected network could be a boom in offering customized policies, these minuscule are taking insurance services to the next step.

The Future of InsurTech

Could technologies like Blockchain, Augmented Reality, Virtual Reality change the world sees insurance sector? Would they bring in the exotic flavors of policies? Only time can tell, for now, let’s explore how these technologies could be handy in insurance sector?

Blockchain

A distributed ledger technology has the potential to ease out fraud detection and risk prevention as per a report from EY. The report also highlights that blockchain is efficient in establishing transparent and customer focussed claims building trust and loyalty for the insurance firms.

Augmented or Virtual Reality

Just imagine driving in stormy weather, an AR app helps you define the road/lane border so that you do not bombard a tree or a car in your parallel path. Or how about a 3D modeling and simulations help customers in making insurance claims easier and faster? Or how about before you go for the home insurance a simulation helps you pinpoint all the areas under insurance rather than reading the lengthy document? It all is a possibility with AR and VR technologies.

With the evolution of technologies, the secret is to be adaptable to change. @Mantra Labs we believe in this, and hence one of our esteemed clients Religare is using our InsurTech solutions in Post-sale, pre-claim, post-claim and renewal processes. It helps in providing customers with transparent and intuitive services that is robust and secured for businesses. A win-win for all.

Reference Links:

https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2016/10/how-augmented-and-virtual-reality-changing-insurance-landscape.pdf

https://www.realexpayments.com/blog/augmented-reality-insurance-businesses/

Latest Trends in Insurance Technology

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Today, the insurance industry is at a digital transformative phase to enhance the business models. There are few key areas we can expect insurers to embrace as they seek to create more automated, user-friendly processes in Insurance sector.

Use of automations and artificial intelligence  

Insurance industry is shifting towards exploring automation of more complex and risky processes rather using of traditional method, which is less effective in case of time and accuracy. Using of emerging technologies like Artificial Intelligence and Machine learning provide the scope of intelligent automation for analysis of huge amount of data generated by IoT and smart wearables devices. These Analysis and cross checking of data help understanding the better customer insights, fraud detections, claims verification and processing.

With the more refined automated technologies and capability of analysing more data, insurance companies like AIG started employing smart drone for automated property assessment and claims processing, which not only helps in accurate assessment but reduces the operational cost also.

Redefining of Insurance distributions

For better user experience, insurers have already generalized the new channel of distribution such as online research, comparison platforms and chatbot for better interaction and understanding, which already impacted in the market of personal insurances. The new direct distribution channels and online comparison platform for direct small insurances are likely to be more effective in coming days.

Companies like Allstate is already allowing small business owner to buy policies in just five minutes, or P2P platform like Gather giving the opportunity to small business owner to self insure and coverage is offered through a captive which is owned by the businesses it insures.Thus offering greater transparency and reducing cost in policies for these type of enterprise.

Insurance through value chain disaggregation

As the market is growing, the specialization in sectors is becoming more popular. As insurers move into advanced and extreme digital stages there is more use of data, automation, connectivity, ecosystem integration, new development methodologies, and a smarter use of IT resources. Some of these companies are providing customer interface with a unique value propositions, some companies provides tools for specialized software solutions for the insurers.

Companies like PolicyBazar provides insurance comparison and gives customized suggestions and recommendations based on the customer needs and choices, using their artificial intelligence.

Data analytics to improve profitability and better customer experience

The exponentially greater data availability and better analytical capability of softwares provide the base of making decision. Cross checking and analysing on the large amount of data coming from various unstructured resources such as social media real time data through various connected devices, helps in better risk management to drive greater profitability as well as better customer experience. Applying a combination of techniques such as predictive modeling, text mining, databases searches and exception reporting, insures are able to understand better customer insight, fraud analytics which help them in making insight driven strategies and risk mitigation strategies.

Sensors, Detectors, and Telematics  for building data

IoT or internet of things refers to the physical objects that are embedded with sensors, which gather information about specific objects and transmit it. These transmitted data are then analyzed as discussed earlier.

In insurances, using of IoT technologies is becoming more popular. In case of home insurances, smart homes is one of the fastest growing segment. Insurances companies are giving more discount on policies for an internet connected Home/Smart home.

Various wearable devices are also in demand as it enables life and health insurers to better engage with customers while obtaining real time insight into risk. Aditya Birla Health  Insurance is offering their policyholders health benefits and rewards for connecting their approved apps and wearable devices to their health app so they can track one’s activity.

Property and casualty insurance companies like AIG , are going to use smart drone for better property assessment.

Blockchain Technology for fraud detection

In coming days Distributed Ledger Technology(DLT) or Blockchain Technology is going to be leveraged across all sector including Insurance for its revolutionary way of sending, receiving and storing information in a secure and decentralized way. Using of Blockchain technology in insurance will improve the quality of service, increase in the volume of data from new data sources, automate claims, also will reduce the operational costs. It has the potential to ease out fraud detection and risk prevention as per a report from EY.

Once insurance and blockchain technology are interconnected, key business process like policy management and claims management are likely to transformed and new business model are expected to emerge using Blockchain.

Augmented Reality/Virtual Reality in Insurance

Though Augmented Reality is leveraged by many other sectors, like in social media or in gaming and other sectors, insurance sector still is limited to areas like marketing or training by simplifying complex explanations, meant for customers and employees. How about a 3D modeling and simulations help customers in making insurance claims easier and faster? Or how about before you go for the home insurance a simulation helps you pinpoint all the areas under insurance rather than reading the lengthy document?

There are big challenges ahead for insurers. With more changing technologies, executives will need to carefully consider the opportunities.

 

 

 

Marketing, Telecom, Healthcare, IT services, FinTech, supply chain management : Which one is bullish on data science?

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Leap of faith has been coming from almost all sectors. Marketing, e-Commerce, Telecom, Healthcare, IT services,FinTech, Blockchain and supply chain management are apparently more strong than others at present as these sectors have huge customer base and have many competitors. They have been trying anything and everything to delight and retain customers, to maximize revenue by data-driven upsell and cross-sell strategies, to understand trends & patterns and to make the best possible strategies . Every business entity is eventually going to adopt big data analytics to survive and prosper in the market.

Almost everyone is optimistic on big data analytics/ data science. Return on investment on data science is very high and perhaps, that is why every business entity and sub-entity want to leverage big data analytics – a combination of data science and big data technologies. Everyone wants to streamline business, minimise the wastage & cost ,maximise the revenue, profit and customer delight in the competitive world. This can happen only when we start automating the process and promote data-driven decision making process.

If you want to know what customers are talking about your product/service/event, please use this API Social Media Sentiment Tracker

If you want to know how healthcare is using data science, please use this API 

If you want to know how Telecom is using data science/network visualization, please use this API

If you want to know how supply chain management is utilizing data science, please use this article

If you want to know how Blockchain/Bitcoin is utilizing data science, please use this API

If you want to know more about the perspective of a data scientist , please use this article

 

FinTech: How AI is transforming the financial industry

Finance has always been the core of any business being done, it caters as platform on which other sectors work upon. With years and years of research towards achieving maximum efficiency in this sector, new age technologies like AI, Machine Leaning and Data Science are now taken into account. This has resulted in birth of an advance AI based system that adapts and learns, from its surrounding.

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ForwardLane is driving a new wave of financial innovation through leveraging advances in cognitive computing and data analytics.

ForwardLane brings personalized high net worth investment intelligence to numerous investors around the globe. This is done, by mimicking and accelerating the human investment process using artificial intelligence and combining it with professional risk analytics. It is a B2B platform used by private banks, wealth managers, digital banks and insurance companies.The team behind ForwardLane is comprised of wealth management specialists with a combined experience of over 175 years. It is backed by a team of highly qualified and experienced engineers that execute the core technologies deployed in serving the customers. The company is supercharging the financial advisor and bringing superior financial advice to mass affluent clients.

The Platform offers vast range of functions such as:

•Dynamic, state-of-the-art cognitive synthesis engine.

•Knowledge base preloaded with 55,000 financial questions and 8,000+ terms.

•Trained with 4.7 million additional questions.

•Contextualized responses based on prior conversations.

•Captures client interactions, history and recommendations for compliance.

•Integrates with multiple CRM Platforms.

SaaS cloud-based delivery, or bespoke/containerized deployment solutions.

In order for such a complex and highly intelligent system to work as planned, ForwardLane rely on data processing, this is achieved thorough extracting relevant information from clusters of data the platform collects. Mantra Labs is using Data Science by providing a dedicated team of problem solvers that assist ForwardLane’s innovative finance management goals. This enables efficient Data processing and timely deployment of resources that the platform truly depends upon.