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.