Advanced technologies are causing an upheaval in the insurance industry. While digital technologies were already consolidating their position in P&C insurance, they are now diversifying their roles and transforming all verticals of the sector. Digital transformation in insurance is no less than a juggernaut that will remain evergreen as it grows and matures.
Here are a few transformative insurance technology trends that companies should look out for:
Unpredictable Growth for Predictive Analysis
Currently, the insurance industry is using predictive analysis for:
● Policy and pricing personalization
● Identifying customer behaviors and patterns
● Triaging claims
● Estimating risk of fraud
● Anticipating market trends
The application of predictive modeling in such ways is enhancing insurance business revenue in many ways.
For instance, a study by Valen Analytics discovered that insurance technology-forward companies using predictive analysis boosted their direct written premiums by a whopping 53% margin against the market average of 18%. Similarly, it improved the organization’s loss ratios by 3 to 9%, which is significant.
We are already moving in the direction where we will witness the imminent growth in the amount of data produced by end-users. As such, we can expect the same level of exponential growth in the use of predictive analytics in insurance as well.
More Intelligent Artificial Intelligence Applications
Artificial intelligence, or AI, is no stranger to the insurance technology sector. Various businesses have been leveraging it for its multi-faceted applications, ranging from service personalization to automation. In fact, one may erroneously believe that AI has reached its max capacity. However, it still has a lot to offer.
Companies hoping to use AI to gain a competitive edge will turn to AI for several uses. Such applications include the building of virtual personal assistants, integration with sensors and remote devices, simulation modeling for possible outcomes, triaging through image analysis, and more. Clearly, more is yet to come.
Machine Learning Will Learn Big
Even though Machine Learning (ML) is a subset of AI, it is branching off as a formidable entity on its own. ML possesses great potential in the tedious and resource-intensive claims settlement process through automation.
As the volumes of data generated by each individual and device increase, ML models will hone in their capabilities and emerge smarter. This chain of events is, in fact, a positive feedback cycle that will trigger the expansion of this segment. Hence, it should come as no surprise that a massive 66% of insurance executives believed that ML will have a high impact on business.
Internet of Things to Cover All Things Internet
It is no secret that the internet has become an integral part of our life. And it has given birth to the widespread adoption of networked devices and technologies. Insurance companies can tap into the many advantages offered by the Internet of Things (IoT) to know their customers better.
A recent survey highlighted how consumers are willing to share a good amount of personal data in lieu of lower pricing and personalized services from insurers and banks. This figure is an indication that gaining information via IoT is ripe low-hanging fruit to capture first-hand data and increase business accuracy.
Chatbots to Keep Customer Chatting
Chatbots are the new face of customer support and service. Insurance has gone beyond IVR-like, menu-based chatbots and released sleek, modernistic bots that can expertly navigate real-life conversations. This change is driven primarily by the developments in AI and ML, along with the demographical shift. The latter would be the clinching factor given that companies will now be serving Millennials, who already possess a proclivity towards chatbots. While the use of chatbots has dominated the pre-sales segment, we will now be seeing more activity in the claims and post-sales units too.
These insurance technology trends mark the upward rise of the insurtech solutions as it solidifies its role in the industry. Seek assistance from insurance technology companies and start devising the transformation roadmap today, so that your business will be future-proof tomorrow!