The world has been going through a rather topsy-turvy time. The time that has seen the rise and fall of businesses across the globe. With digitalization becoming an ever-growing integral part of the world. There’s no doing away with the fact that the future is digital.
An industry that was quite satisfied with not having to deal with the rise of digitalization was the insurance industry. A relatively stable industry that did not have to worry about making too many changes to its approach. Since, their line of work was consistent, reliable, and standardized for the most part.
In came insurtech – the inculcating of technology into the world of insurance. A move that wasn’t quite welcoming in the insurance market. The reason was quite simple. Insurtech was advocating for a digitalized approach to the workings of the industry. An approach that they were quite unaware of.
What Is Insurtech?
Broadly defined, insurtech is the use of innovative technology to cater to insurance shoppers and deliver not just savings to them. Also, embark on a journey of efficiency by cause disruptions in the current model used by the majority of insurance carriers.
More often than not, insurtech companies go on to deal with complex data and invoke mechanisms that traditional insurance carriers do not quite work with. The result of this is more streamlined data that is better suited to the companies needs and helps when grouping individuals and assessing risks.
Insurtech Companies
With the rise of insurance technology trends in the business world, Insurtech companies are not just heralded for their better-curated pricing models but also due to their ability to use artificial intelligence to customize packages and embark on coverage processes without having to deal with middlemen/brokers. In other words, it’s a win-win for everyone (except insurance brokers).
Even insurance customers have now come out to advocate for not just active protection but also the ability to participate in a “pay as you go” model; both of which help to ensure that customers get their money’s worth.
Insurtech companies have three distinct types:
Enablers:
Companies that offer specialized services to insurers are not only diverse but offered at each separate stage.
Distributors:
Think of these as “shops”, since their main goal is to help traditional insurers sell insurance online.
Challengers:
These are the real trouble-makers. Companies that aim to introduce new business models and working approaches to the insurance sector.
Insurance Technology Trends
Insurtech has given rise to several new technological advancements that have slowly begun to make their mark on the industry. Let’s see some future insurance technology trends or insurtech trends to better understand the dynamics surrounding the market at large.
Telematics Devices
To move out of their already existing risk groups and also save money in the process, consumers are beginning to incorporate technology into their everyday lives. An end product of which is telematics devices.
These rather small devices can track driving habits and pass them onto the insurer. This not only ensures real-time tracking and provides trends/histories that can be there into consideration when visiting/discussing insurance products/packages but also gives the consumer information that they might have otherwise missed out on – i.e. data on their driving habits.
Robotic Process Automation (RPA)
We’ve all watched movies where robots have begun to take over menial everyday tasks in an attempt at taking over the human race forever. As dramatic (and scary) this might seem, the insurance industry has not quite yet seen a radical takeover.
Instead, through the inculcation of RPA, the vision is to simply automate transactions and processes like claims and document verification to better structure the customer journey and insurance work processes.
In the future, customers could also begin to see more viable options for self-service which would lead to opportunities for them to self-navigate through most of the processes. The result of which would be fewer back-office jobs. However, this goes both ways since this will also increase the need for individuals with experience in data analytics and machine learning – because the robots have to learn from someone, right?
This will eventually foster collaboration between humans and machines by introducing the automation of repetitive tasks. While also improving the quality of jobs of those involved in the processes.
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Blockchain
As scary as this concept might seem to certain individuals, this is in fact an opportunity for massive growth since it holds a lot of potentials. In simple words, blockchain is just a record of digital events that are shared between a variety of members and can only be changed/updated on the consensus of the majority of participants. Moreover, information on it can apparently stay forever which basically means you have a backup with no expiry date.
Insurtech industry technology could cause quite a shift in aspects such as assessment and fraud prevention by incorporating information and data from a wide variety of sources. If that wasn’t enough, then the technology also holds the potential to garner historical data and establish consumer trends to better understand and track their journeys.
With such rapid advancements, there is no shocker in the fact that many people have begun raising the question, “Is this an opportunity or a threat?”
The answer to that is neither a simple “yes” or “no”. In fact, it’s a little more complicated than that.
Insurtech advocates for an approach that could potentially cut down on human resources; a prospect that no one is too excited for. This, coupled with the unreliability that comes with the usage of new-age tech poses an argument for not incorporating insurtech.
Also, insurtech offers a customer and business journey like never before. A journey that caters to individual needs while also ensuring a systematic approach for the entire process.
Moreover, the recent events in the world showing us the unpredictability that surrounds us all. It’s even more important to incorporate technology into the world of insurance. Mainly to ensure that things are kept afloat no matter how strong the waves may be.
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Latest On Insurtech
It’s still too early to call a verdict on the insurtech industry. Moreover, we can not consider it a success or a failure. Mainly because there isn’t enough accurate data that could paint an accurate image of the potential that the industry holds.
By looking into future trends of insurance technology. One thing is for sure, insurtech will cater to individual needs. For example, the basis will be on personalized data rather than on averages. Since insurtech has the bandwidth to incorporate, store and analyze data from a wide array of sources. It definitely has the potential to create individual journeys for customers and offer them accurate data that is pertinent to their individual histories/experiences.
While this may prove to be a rather expensive venture. The flip-side of getting more satisfied customers makes it worth it. With consumers that are catered to, and provided a rather personalized customer experience/interaction, the industry has gained an automatic fan following from the market.
So the future, as they say, is most definitely digital.