Almost every industry today depends on new technology if it wants to achieve its full potential. When companies want to profit and be productive, they need to invest in innovative ideas. The same principle is involved in the growth of the insurance industry as well.
Over the years, the insurance industry has adopted new technologies that have brought the change in the demand side—customers have more choice and are willing to look for many solutions to their problems. When it comes to supply, competitiveness has also grown, so insurance companies need to adopt new business models to thrive. It’s hard to predict exactly how technology trends will change the insurance industry, but they will (and in multiple ways). Let’s see what we know today:
Artificial intelligence is seriously gaining importance in every sphere of human life and every industry. This growth of AI became even more obvious once the pandemic struck and the process of digitalization of many industries, insurance included, started to accelerate. In the near future, we can expect to see even more emphasis on digital tech.
AI is closely connected to physical robotics, mainly 3D printing. While on the surface, 3D printing doesn’t have any connections with insurance, we can expect to see more and more 3D printed buildings and vehicles even, which will affect risk assessment and insurance. Additionally, the autonomous vehicles industry is pushing forward strongly, so this change will definitely affect risk pools.
Every industry strongly relies on predicting future consumer needs and behaviors. Companies that use predictive analytics will be able to prepare for changes and stay afloat. In the insurance industry, predictive analytics can predict customer behavior by collecting consumer data. This process is useful in many instances such as identifying fraud, triaging claims, detecting new trends and customers at risk of cancellation, predicting price changes. It can also be used in calculating comprehensive insurance rates, so everyone is leaving the insurance provider offices or websites satisfied.
With machine learning, we will not only get better claim proceedings, but also many new automated processes connected to it. This innovative tech allows easier file analysis by using programmed algorithms that can boost the speed and accuracy of the analysis.
Machine learning can be implemented in claims sectors, policy administration, risk assessment, etc. According to surveys, 66% of insurance professionals believe that machine learning will impact commercial lines of business while 53% of them think it can potentially impact personal lines as well.
Internet of Things
We all understand the advantages of data and data management. Well, the Internet of Things will make these tasks even easier. Since most insurance buyers are willing to exchange their personal information for lower rates and other savings, the IoT must find a way to automate data sharing. IoT can be a useful asset to insurance companies if they want to improve accuracy and revenue.
Digital security was once just a concern, but today, it’s a pure necessity for all insurance companies. Due to remote work and all the new internet services, the way people communicate and do business has changed a lot, so it’s crucial to improve insurance industry security for the comfort of all. When it comes to cybersecurity, blockchain technology will be a huge ally. This tech can be used for creating smart contracts, automatically executed actions, and safer tracking of claims and condition updates.
Today, from entertainment to medical practices, many websites have automated response systems in place. These so-called chatbots perform mostly customer service tasks. According to some estimations, in the next 5 years, more than 90% of customer interactions will be performed by chatbots. It’s the very near future we’re talking about, so all insurance companies need to start considering this advancement. Chatbots are tools that combine AI and machine learning, so they can imitate humans in customer interaction allowing employees to save time on mindless tasks and generate more money where their help is actually needed.
Almost all internet users today are using social media platforms, either for work, entertainment or socializing. The social media environment is very attractive for companies as well, since it can be used to connect, communicate and check up on customers. It comes without saying that insurance companies can also benefit from social media, especially in the field of marketing. Through these platforms, companies can express their personality and achieve serious engagement without spending too much money. And lastly, social media is a goldmine of data, so their findings can improve risk assessment, boost fraud detection and provide users with a whole new set of services and improved user experiences.
Technology makes our lives easier every day, but it can also be used for commercial gain. The insurance industry can utilize technology to perform many complicated and overly simple tasks, while professionals can focus on users and pricing. Only companies that follow tech trends can expect to stay ahead of the competition and meet the changing market demand.