5 technology trends transforming Insurance Industries
In the era of digital technology, technological advancement has become a strategic priority for every business to meet the growing consumer expectations and the pace of digital transformation. The Insurance industry is no exception. According to a recent Accenture report, “86% of insurers believe that innovation must happen at an increasingly rapid pace to retain a competitive edge”.
Technology has brought disruption to the insurance industry in several ways and the reforming insurance leaders have started making investments in the latest technologies that will help them to become more customer-centric, cost-efficient and create operational excellence.
With so much change and so much at stake, where are the right areas to focus? Our global insurance team has identified five emerging insurance technologies that drive significant changes and their application in the insurance industry.
- Artificial intelligence (AI) – World Economic Forum foresees that the impact of AI can be radical and transformative, yet there are many variations in AI definitions. Regardless of these variations, AI is changing the traditional insurance operating models and shifting the competitive dynamics. Here are a few use cases of AI.
- Facial recognition in underwriting – The insurance industry was among the first to use facial recognition technology to improve the underwriting process. The app utilizes a combination of facial recognition technology to scan the selfie and use gamification techniques to detect life-threatening habits and predict the life span to calculate the premiums.
- Personalized Customer Experience – AI-based chatbot provides a delightful automated customized buying experience for prospects, based on their geographical information and social data. It also offers a quick response to client queries.
- Robotic Process Automation – RPA automates the mundane routine task of the Insurance Industry and thus reduces the workload and cost of operations and also saves time, money, and improves customer satisfaction.
- Claims Settlement – RPA reduces the claims processes by automating the data collection process. Our experience shows that automated document processing and information extraction from claims forms can significantly reduce the average processing times.
- Data Management – Manual data collection and entry is an arduous task and could lead to inconsistencies and errors in data management. RPA automates & simplifies the data management processes and that too at high speeds.
- Big data and Predictive Analytics – Everyday a massive amount of data is generated exponentially. Big data and advanced analytics help to manage, analyze, and understand data, and make forecasts. This help Insurance companies to make data-driven decisions to drive profitability to their business.
- Analytical Insights – Data analytics solutions provide valuable insight into insurance data for better risk analysis and provide recommendations to improve their process and boost profitability.
- Claims Management – Advanced data analytics techniques like predictive analysis, help identify fraudulent claims effectively through the usage of text mining, rules, and database searches.
- Customer Acquisition – Data Analytics allows the insurance companies to know, understand, and analyze their customer behavior and identify patterns, based on which they come up with customized quotes to sell their products online and maximize their profits.
- Machine Learning (ML) – ML can offer improved underwriting, reduce fraud in claims data and malicious activities in payment systems. Trained ML models can help in identifying lapsed policies, billing anomalies and make personalized offers.
- Predictive pricing – Right pricing is key to success in the Insurance Industry. The traditional model of historical data can prove to be very risky. ML based new tools and techniques help the insurance companies to come up with the right pricing and risk selection for their clients, triage claims faster and even identify fraud.
- Underwriting – Machine Learning technology helps to expedite the underwriting process. The technology helps to automate the data collection process and accurately deliver work on time. ML-based technology, like Telematics, uses policyholder data to assess and calculate policies and insurance premiums charges correctly.
- Augmented Reality / Virtual Reality – Augmented Reality / Virtual Reality provide a superior experience to customers in learning about insurance products and services. The usage of AR/VR technologies applies in remote claims handling process, accident recreation, and many more.
- Insurance Policy Education – AR/VR simplifies the complicated insurance policy education with exciting and engaging AR/VR videos. The videos can be stimulating real-life situations to showcase the value of life, health, and various insurance coverage plans and help to boost insurance policy purchase rate.
- Virtual Driving Test – VR can be used by insurers to take practical driving tests that could help insurance providers while deciding the coverage for a new client.
The way forward
With the advancement in technologies, what is different now is, traditional Insurance institutions can leverage technologies to acquire and process internal and external data at high speeds and come up with sustainable and robust business models to compete with the digital natives. Dynamic technological changes evolve the customer expectations and demands for the simplified online personalized experience. The first step to successfully adopt any new technology would be to understand the impact across the value chain and invest in the right technology.