By Swagata Mondal - January 4, 2021
Like any other sector where the latest technology has been applied to boost services and customer experience, the insurance industry, too, needed modern ways of working for a long time now. And that’s where insurtech comes in, introducing an innovation in the insurance sector.
You might find it hard to believe, but technology has a significant role to play in improving both financial health and growth. Insurtech is delivering just what the insurance market desperately needs right now, which is innovation through modern business models.
Not sure whether Insurtech will be a potential technological revolution to the insurance industry or not? Then why not get out of your thoughts and doubts and refer to some actual facts related to insurtech!
We have tried our best to give you a detailed insight into how insurtech is bringing a digital transformation in the insurance industry and helping the industry to match the pace of this digitized technology-based era.
The term ‘insurtech’ refers to insurance technology. In simpler words, it is the use and impact of technology on insurance industry that includes all insurance types like home, car, health, and life, etc.
To be specific, it’s a fintech branch that is completely dedicated to the insurance sector for supporting all aspects of the insurance business, using various emerging technologies such as artificial intelligence, blockchain, IoT, etc.
You can take a quick glimpse here how insurtech is going to be the next big thing in the insurance industry.
Given the changing consumer preferences and behaviors, reputed national insurers, as well as small insurance companies, are adapting insurtech to give their customer service a digital-first approach.
Insurtech’s application of the coming up technologies has helped the insurance sector in gathering important insights that can support the business operations better. From sales to marketing, claim processing, and underwriting to product designing, insurtech offers better business opportunities for all stages of the insurance value chain.
The following report is going to explain how even during and after the Covid-19 pandemic outbreak, the global market growth for insurtech will accelerate.
Image Source: Business Wire
Today, most of us use different wearable and mobile devices in our day to day life. The dependency on such devices is the demand for this technology-based era. It’s what keeps things going. And as a result, companies can now collect huge amounts of data about us.
But what do they do with the data they collect about us?
Well, they analyze those data and use those to better understand and anticipate our requirements and offer us exactly what we are looking for. They use the data to simply optimize our experience with their services. And the insurance industry is no more an exception. Opting for insurtech means new ideas for insurance companies.
Insurtech collects and aggregates data for every individual customer and helps the insurance companies provide different insurance coverage policies over mobile apps which serve as an added convenience layer in boosting the customer experience.
Almost every segment of the insurance business has been impacted by insurtech. Simplified process, customer friendly services, and simpler products have become synonymous with this modern insurance tech.
Want to get a better idea about how this modern and innovative insurance technology is revolutionizing the insurance industry, then read on.
Image Source: Deloitte
Say bye-bye to filling out long, complicated, and time-consuming insurance forms. Say sayonara to the one-size-fits-all insurance policy. With insurtech, now even a small startup insurance agency can offer a varied range of tailor-made policies and provide the customers with exactly the coverage they are looking for. No more paying for the expensive policies that came with unnecessary features.
Insurtech can use the data collected from the consumers to offer the right insurance products at the right time. And this means, not only do insurance companies get to offer customized insurance deals to the customers, but the customers can also know about the latest insurance deals and discounts, based on the up-to-date driver data. While making the customers aware of the latest insurance deals according to their needs means more business to insurance companies; customers’ access to the latest insurance deals means cost savings for the consumers.
With insurtech, the insurance business is taking a digital-first business approach that mainly focuses on customer experience which means customers are likely to get more and better innovative insurance products in 2020 and beyond from insurtech than they ever got from the traditional insurance models.
To help the insurers boost the different stages of their value chain, insurtech uses several emerging technologies. From ensuring higher efficiency in addressing customer demand, reducing costs, these technologies help the insurance industry in different ways.
Let’s check out what are these emerging technologies that insurtech leverages upon for developing innovative insurance business models.
When it comes to improving customer experience, automating repetitive processes, and optimizing risk analysis, the insurance industry was one the first to put AI-based technology to use. Since insurance agents do not communicate with the customers regularly, AI can do the job of collecting customer data, sorting the info, and offering accurate customer profiles on behalf of the agents.
Utilizing the AI power, insurance companies can use trackers and sensors (featuring intelligent and dynamic algorithms) in the health insurance and automotive insurance segment. Plus, AI technology can also help in reducing the need for manpower resources as the bots will autonomously review claims, and offer instant claim settlements.
IoT refers to the network of interconnected devices where various everyday consumer goods like cellphones, refrigerators, and cars are connected over the internet. In the insurance industry, IoT helps with interacting with customers in innovative ways to collect data and analyze them.
While omnichannel communications let insurers communicate with the customers on different devices on any location; the telemetry based claim processing and insurance policies let insurers analyze the collected data from different devices to support the right insurance decisions.
For example, when one purchases Root insurance, he/she can download an app that works on assessing the driving behavior. Based on this behavior assessment and data analysis, Root determines the amount of premium payable by the customer. Sounds like a whole new world of technology, isn’t it! But hey, it’s all insurtech, of course!
Insurtech has adapted machine learning technology to predict risks, a crucial segment in the insurance market.
In machine learning, the software collects data from IoT sensors, which can be installed in a car or a house as a part of telematics or Smart house systems.
But in the insurance sector, machine learning (pre-trained) can help in systemizing unstructured data i.e. recognizing handwritten records, transcribing calls, identifying assigned risks, etc. even programming chatbots to talk like a human is possible with machine learning.
With machine learning, your insurance company can handle claims handling, risk modeling, underwriting, and distribution flawlessly.
The very purpose of using blockchain technology in the insurance industry is to automate the industry. Blockchain refers to the technology of keeping records safely. It is like a digital notebook with multiple owners.
Considering the role that blockchain plays in ensuring security and privacy, insurtech firms and companies can utilize this technology to
Along with IoT, blockchain, and artificial intelligence, connected technology has a crucial role to play in helping insurtech companies with their business processes. From underwriting policies to processing claims and assessing risks, the connected technology impacts the insurance technology in various ways. Examples of connected technologies are drones, robotics, and autonomous vehicles.
Let’s take a closer look at how they help insurtech firms.
Companies like Netflix, Uber, and Apple are hailed as game-changers in their respective industries. Though the insurance sector still lacks something like that; still, the growing investor interest can lead to the emergence of the next technological giant in this industry pretty soon. And how quickly insurance businesses can adapt to insurtech is certainly going to be the determining factor in who the next game-changer will be.
Want your insurance company to go to the next level of innovation? Then click here and get in touch with us, Klizo Solutions, to implement the insurtech tools as soon as possible.
We are already working with cutting-edge technologies and building some cool techs for our clients like SugarLeaf, which is committed to providing cannabis businesses proper coverage, at a price you can afford. Remember, we are here to help you outshine your competitors and provide you with the technology innovation in the insurance industry you need right now!