How Technology and Innovation are Impacting InsuranceJanuary 22, 2021 No Comments
Featured article by Rebecca Lee, Independent Technology Author
As we move into the 2020s and to an inevitably more technology-based society than ever before, there are some sectors of industry that are able to improve their services better than others.
One of these is the insurance sector.
With more data and intelligently automated systems on offer in the business and insurance fields than ever before, it’s not too surprising that moving forward we’re going to see a lot of change in how insurance is offered to individuals, families and businesses.
Whether it’s a more streamlined and efficient claim status call or an entirely-online claim check, both technology and innovative security systems are making this possible.
That being said, let’s take a look at how innovation and digital tools are transforming the insurance industry and how your experience is going to change.
Investment in Technology
Before we delve into some of the direct changes that technology and innovation are making to the insurance industry, we’ll first take a look at the size of the investment and the focus on investment in tech.
Off the top, the United States insurance market spent almost $225 billion on its information technology systems in 2019 alone. This is a major testament to the focus of these companies on changing and adapting to a more digital-first insurance process.
With 2020 slightly dampening this investment, we can still expect some major investments to have taken place during this time.
When we look to Australian insurers, we can assume that our providers are also following suit, which gives us insight into a few changes being made such as the removal of legacy IT systems and a more serious focus on all-digital systems.
The Transition from Paper
When we look toward the future of insurance, there’s likely not a good chance you envision a tonne of paper documents — and with data telling us that insurers are now heavily focused on digitising and intelligently analysing paper documents to replace them with all-digital versions, this future doesn’t seem too far off.
One of the biggest investments and innovative processes affecting insurance is the move to all-digital documentation and certificates. As you’ll know, claim processes and even the process of signing up to insurance providers involves a lot of paper, which is slow, costly and doesn’t result in high customer satisfaction.
Innovation in the cloud-based analysis, storage and conversion of physical documents is changing this forever. That in mind, you could soon expect instant results from claims, applications and other insurance services.
A second thing to note is that a lot of these paper documents can be analysed and used to develop a document chain to tell a story about clients and customers of an insurance business — thus creating avenues for data collection and profit.
To conclude, through the movement from paper to digital documentation, insurers are saving time, streamlining workflows and able to save money on their services offered, which may reduce overhead and result in savings for customers across the board.
Machine Learning and Claim Acceptance or Rejection
As we turn to a rather new technology being utilised in the insurance industry, it’s become more apparent than ever that insurance providers are taking digitisation and improvement in efficiency more seriously than ever.
For example, in the agriculture insurance sector, insurers would often need to assess a myriad of lots or farmland properties to determine whether a claim should be processed or not.
Though with satellite data, artificial intelligence and machine learning, these insurance firms are able to use this collected satellite imagery and the AI to scan and assess whether claims are able to be approved or rejected — taking countless man hours out of the process with agricultural automation.
From here, the locations in the data that can’t be automatically verified will then be assessed in-person by an insurance agent.
As expected, this process will make claim processes incredibly quick for both the customer and the insurer, saving time and money for all parties involved.
Personalised Insurance Premiums
Another major benefit coming from innovation, data collection and technology in the world of insurance is the reliance on user data to personalise premium costs.
With information collected from all avenues including social media, wearables and more, insurance providers are able to better price their premiums to suit their customer’s needs and lifestyles.
That in mind, if customers or businesses understand and are aware of their lifestyle or actions in relation to their insurance cost and actively make changes to reduce these costs — they should be rewarded with a lower premium. Those who do not, won’t expect these reduced premiums.
This data on hand, insurers can then better improve their profit and reduce losses from those who are at a higher chance of making claims, and able to recover potential losses through higher premiums.
As an example, companies like Beam offer a smart toothbrush which essentially collects data on how well customer’s brush their teeth and dental insurers use this data accordingly.
If a customer forgoes brushing their teeth correctly, or is often found to have poorer dental hygiene as a result of poor brushing, their premiums will evidently be higher than those who better take care of their teeth.
Those points in mind, the more data on hand, when paired with customer information correlation technology, insurers can now develop a far more personalised and relevant pricing experience for their customers.
As is outlined above, it is more visible than ever that the somewhat lacking insurance sector is beginning to take a more serious approach with regards to technology and innovation than ever before.
What was once a rather lacklustre industry that relied on almost entirely traditional methods is now making leaps and bounds in the use of technology and offering a far more convenient experience for customers.DATA and ANALYTICS , SOCIAL BUSINESS