The insurance industry is undergoing a major transformation. The emergence of new technology means that the traditional model of insuring people, places and things is being replaced by insurance software driven by data and analytics.
In this blog post, we’ll explore what Insurtech is and what are the top 10 Insurtech innovations.
What Is Insurtech?
Insurtech is the intersection of insurance and technology. It offers new ways to improve efficiency for insurance companies and other insurance-related businesses.
This type of technology is becoming more popular as IoT devices become more advanced and the need for better data management grows.
Insurtech uses automation and artificial intelligence to make decisions about insurance claims, coverage options, and more. The goal is to provide better service while reducing costs and improving accuracy.
- The global insurtech market was valued at $3.85 billion in 2021 and is expected to grow at a CAGR of 51.7% between 2022 and 2030.
- Based on McKinsey’s estimates, 10% to 55% of insurance processes will be automated between 2030 and 2040.
What Are The Top 10 Insurtech Innovations
Here are the top ten Insurtech innovations that are shaping the future of the insurance industry:
#1 Mobile Apps
Mobile apps increase customer engagement and make the insurance process more seamless. They can collect data, manage claims and provide a better user experience. Further, they can also help insurers reach customers on the go and help consumers understand their insurance policies better.
A chatbot is a new way to interact with your customers. A chatbot is an artificial intelligence program that provides you with the same services as a traditional customer service representative.
Chatbots are especially useful because they can offer instant answers to many common questions, saving the consumer time. Many insurance companies also use chatbots for complex tasks like filing claims or getting price quotes on new policies. Since these tasks often require information from several different sources, it’s easier for a bot than an actual human being to handle this.
Blockchain is a distributed database. It records transactions so that no one party can change the data without the agreement of all other parties.
Insurers use it for identity management, KYC (know your customer), fraud prevention, and smart contracts.
#4 Cloud Computing
Cloud computing is storing data, applications and other resources on remote servers. It allows users to access their data and applications from any location, making it perfect for people who often travel or have multiple locations.
Further, it is more secure than traditional data storage methods because the user does not own the server that holds their information. Instead, they have access to all their files through an internet connection.
#5 Artificial Intelligence
Artificial Intelligence is used for customer service and operational efficiency. With AI, insurers can develop algorithms that perform underwriting, risk assessment or fraud detection tasks—all at superhuman speeds.
It allows them to provide faster responses while reducing costs associated with manual processes.
Further, the ability of artificial intelligence systems to make accurate predictions about what’s going on right now (or might happen tomorrow) gives companies an edge over competitors who don’t have access to similar technology.
#6 Machine Learning
Machine learning helps insurers better understand their customers by analyzing historical data collected from thousands or millions of previous interactions with policyholders across multiple channels (e-mail, phone calls, chatbots).
Insurance companies can then use these insights to improve current processes and predict future trends in customer behavior.
#7 Internet Of Things (IoT) And Telematics
The IoT is a network of physical devices, vehicles, home appliances and other items embedded with electronics, software, sensors and network connectivity, enabling these objects to connect and exchange data.
For example, the sensors in your car can send information about how you’re driving back to your insurance company.
This facility enables insurance companies to offer better rates if you drive safely.
Furthermore, many insurers are now offering customers “smart meters” that monitor energy usage within the home or business. If electricity use rises over time (for example, during peak hours), this can signal that there’s been some break-in or theft at the location.
#8 Wearables And In-Home Sensors
Wearables and in-home sensors are a new frontier for insurance. Wearables can monitor your health and fitness, while sensors can detect when something goes wrong with your home or car.
Wearable tech is clothing with built-in computers and sensors, allowing you to track your activity, sleep patterns, calorie intake and more. They’re still new but could be a valuable tool for insurance companies looking to better understand customer risk factors—and thus offer more customized plans.
Sensors also help companies gather data about their customers’ behavior at home or in the vehicle, which is beneficial when assessing claims after an accident.
#9 Automated Claims Processing
Automated claims processing uses artificial intelligence (AI) to process various insurance products, including health and property insurance.
Automated claims management allows companies that traditionally relied on manual processes to streamline operations without hiring additional employees. It saves them money and improves customer satisfaction by reducing errors and delays in resolving claims.
#10 Digitized Underwriting Process
Underwriting is the process of evaluating an application for insurance coverage. Underwriters approve or deny coverage based on various factors, including the risk associated with insuring the individual or business. The complexity of underwriting makes it a time-intensive task that has traditionally relied on human labor.
The digitization of this process would allow insurers to assess applications automatically through algorithms and machine learning. It allows them to quickly approve (or reject) high-risk applicants before they go through manual underwriting processes.
The insurance industry has been an early adopter of new technology. As such, it is on the cutting edge of innovation and often leads the way in finding ways to improve the customer experience.