Authored by Mr. Pankaj Chauhan, CEO and MD, EPOCH Insurance Brokers
Technology has revolutionized every aspect of the world in which we live, and is likely the second greatest force, changing human needs and business nature. It goes without saying that the Insurance industry is no exception here.
Lately, technology drives innovation in the insurance industry leading to several milestones. The giant insurance leaders have begun to shift towards the latest innovative technologies that will help them become more customer-centered and create operational excellence.
Some of the major technological innovations in the insurance sector are
Increase penetration and sale in existing markets
The entry of new markets and the expansion of existing ones is an area of great global interest within the insurance sector. Successful business strategies for insurers entering or growing in emerging markets involves a high rate of growth, increased size, and greater emphasis on life insurance.
AI and IoT
Artificial intelligence advances allow incumbents to automate ever more complicated tasks, including addressing all forms of customer queries. Not only does the development of AI in insurance speed up the time it takes for a customer to purchase a policy or settle a claim, but it also takes historical and behavioral data such as a driving record and creates more personalized packages. Also, a suite of Internet of Things ( IoT) technologies for insurers with more mature technology capabilities can help to reduce manual claims and pricing interventions.
Blockchain promoting transparency
Blockchain technology can drive radical change in the insurance industry while increasing transparency and results throughout the value chain.
In the insurance industry, there are several challenges, such as complex compliance issues, limited growth in mature markets, third-party payment transactions, fraudulent claims activity, and handling huge amounts of data. Using Blockchain technology can give data visibility, making the process transparent and secure. By logging every transaction it can easily remove suspicious transactions and duplicate them. It can also manage, share, and monetize large amounts of data properly, in turn saving a considerable amount of time.
Customers have more advanced and complex needs and are more aware than ever of their choices. They want customised service and customized communications – that’s why insurers need to digitize services and optimize all interactions. According to the Global Consumer Insurance Survey, 80 % of customers are prepared to use digital and remote channel options for various purposes, tasks, and transactions.
RPA – for managing claims and data management
The Robotic Process Automation ( RPA) automates the insurance industry’s mundane routine workflow. Thus, it reduces the workload and operating costs and improves customer satisfaction. By automating the data collection process, it also reduces the claims processes.
It’s also a difficult task when it comes to manual data collection and entry, and could lead to inconsistencies and data management errors. RPA simplifies the process of managing data at great speed.
At the elevation of emerging technologies
Additional technologies such as cloud computing, advanced analytics, a global positioning system ( GPS), telematics, digital platforms, and drones provide new ways of measuring and controlling risk, connecting with consumers, and expanding insurance. They also allow for new insurance services, products, and business models to be produced.
Through Technology we can smooth the functioning of the following systems:
Internal workflow automation:
Insurers use technology to automate repetitive tasks that are generally associated with obtaining data from a back-end system or placing data in a back-end system. With its help, software robots that can be invoked to eliminate repetitive work performed by people at different points within the overall business process.
The procedure is time-consuming, and paper-intensive, from buying a policy to raising a claim. One can leverage technology to address these concerns to make the customer experience very smooth and trouble-free. It will thus reduce the insurer’s liability, and the benefit can be passed on to the customers through lower premiums.
Telematics is one of the digital innovations which will have a drastic impact on the insurance sector. With its assistance, insurers can increase their frequency of customer interaction to provide extra services, and through specialization enhance their profitability. Telematics can also help assess risk and calculate renewal premium costs.
Cognitive computing or chatbots are generally being used for insurance today. They can be incredibly powerful, augmenting human interaction and decreasing turnaround time on processes. Most chatbots are used to answer frequently asked questions and to instantly resolve customer queries.