The latest technologies are changing the way customers interact with companies. Insurance Technology’s biggest drivers include Artificial Intelligence, Machine Learning, Big Data, IoT, Blockchain, and Digital Ecosystems. Insurers are already investing in Insurtech, but a large proportion of MGAs and agents in the industry remain untapped.
What is Insurtech? Why should we care about it?
According to Investopedia, Insurtech is all about using technology-driven innovations designed to boost savings and enhance efficiency from the current insurance industry model. In simpler terms, Insurtech is the amalgamation of Insurance & Technology.
In contrast to other markets, the have always been inclined to the traditional way of doing business, at least until recent years. Advances in insurance technology have given a platform to upcoming Insurtech startups to thrive in the industry.
Now let’s jump into some of the insurance technology trends of 2020 that are going to change the industry and also how you can use these trends for your benefit!
Insurtech Trend 1: Artificial Intelligence and Machine Learning
The insurance community traditionally has been slow to adopt new technologies. The disruption by digital mechanisms like AI and Machine Learning are slowly starting to redefine the essence of the insurance sector – customer relationship through trust and advice.
Big data and machine learning are technologies that are mostly used by insurers, not agents. These technologies allow insurers to provide their products and services online – through their websites, mobile applications, and even through texts.
The takeaway- insurance technology does not replace insurance agents but rather helps them provide better customer service.
Use Case for AI in the insurance Industry:
- Image Analytics
- Machine Learning in Underwriting (Automated Process of Claims)
- Process Automation of Data Intake
- Connected Claims Processing
- Chatbots and Virtual Agents
Use Case for ML in the insurance industry
- Lapse management
- Recommendation engine
- Assessor assistant
- Property analysis
- Fraud detection
- Personalized offers
- Experience studies
Insurtech Trend 2: Big Data & IoT
‘Customer Retention is the key to making your business successful. You have to listen to your customers and address their problems to make them happy.’ If you’ve been a part of any business, you’ve probably heard this mantra.
In recent years, customer retention has proven to be a better indicator of success than operational efficiency. A study from Harvard Business School shows that an increase in customer retention rates by only 5% will increase your revenue by 25-95%.
But how does insurance technology come into this?
A lot of insurers and even agencies are investing vast amounts of money in integrating big data analytics and intelligence into their business models. Big data allows you to use data processing models that store customer information and use it to map out their preferences.
There is a lot of potential for IoT and big data in the insurance industry. Many insurers are collaborating with companies like Vitality and Amazon to provide more tailored services to their customers. Chatbots and virtual assistants are also very popular for personalized real-time customer assistance.
IoT facilitates risk assessment to insurers in different markets by gathering data through devices like GPS car tracking devices, smart smoke alarms, and alarm systems to sell them personalized products.
The takeaway- The use of Big Data and IoT in insurance allows agents to find new customers in niche markets and retain existing ones by using customer data to provide personalized service.
Insurtech Trend 3: Digital Ecosystems
Ecosystems are customer-centric networks through which products and services are offered by various players.
Insurtech agencies now pose significant competition to insurers who are selling policies directly. Many insurers over the years have invested a substantial amount of capital in insurance technology for themselves. Despite this, the results have not turned out in their favor.
Carriers with Insurtech agency giving competition to carriers not using Insurtech agencies.
However, with careful analysis, collaboration, and integration, specialists believe that they can close the gap between insurers and Insurtech agencies.
According to worldInsurTechreport.com, 90% of Insurtech startups and 70% of Insurers agree with collaboration to develop a new ecosystem. Also, 96% of insurers do think that digital ecosystems are having an impact on the insurance industry.
Above all, Insurtech’s distinct aptitudes make incubators the perfect partner for nurturing a strong foundation in the marketplace. A lot of traditional insurance agencies might be uncertain about the road ahead.
It is high time for these agencies to either invest in insurance technology and innovation, partner with an Insurtech agency or just shut down their agencies for good.
Don’t panic; this will not happen immediately. But if you’re an agent and you want your career to grow, then this is the right time for you to hop in the train of insurance technology. It’s now or never.
The takeaway- Digital ecosystems are blooming – join the insurance technology wave before it’s too late.
Few best Insurance Memes of 2019
- Insurance is a cutthroat business.
Insurance Agents and The Mafia are very similar.
Both start their pitches with “That’s a nice family you got there. It’d be a shame for them if anything happened to you, wouldn’t it?”
- The woes of an insurance agent
Agent: “Thank you, Mr. Smith. I wish I had 15 more clients like you.”
Mr. Smith (surprised): “But why? I file a lot of claims and always pay premiums late.”
Agent: “I’d still like 15 clients like you. The issue is that I have 150 clients like you.”
- Getting creative with sales pitches
Life insurance agents to their clients: “It’s fine, don’t rush. You can sleep on it. If you wake up tomorrow, let me know what you decide.”
- The insurance business is diverse too!
How do insurance agents, underwriters, and actuaries drive?
The agent favors the accelerator, the underwriter favors the brakes, and the actuary decides the way forward by looking at the back window.
I have been associated with PCI for the last five and half years. I am ALMI, ACS and CSM certified professional with 12+ years of experience as Managing Consultant and Software Testing Professional with rich experience in Life/Annuity Insurance, General Insurance, Property & Casualty Insurance Domain.