A broadening focus on customers’ experiences and journeys is now arising as a major imperative for the insurance sector. The era of long paper-based forms and numerous signatures is now behind us. Customers now expect a seamless and transparent experience empowered by technology that equips quick information. They are now determining new standards of ease, value, and convenience, hoping 24-hour access along with personalized products at competitive prices. We have now shifted into an era of customized high-touch service, something that insurers will require to administer as a hygiene factor in the future. High-quality interactions are appreciated to inspire loyalty in order to put insurers at the center of the action plan.
Impact of Technology on the Industry
The majorities of the trends in the insurance industry now are either technology associated or have technology as one of its drivers. Most of these trends have low market penetration and will take a few years for mainstream adoption. The IoT has a transformative impact on the insurance industry with the ability to revolutionize several parts of the insurance value chain over the coming few years.
The entry of non-traditional enterprises, Big Data and mHealth applications in the insurance industry are also additional high-impact trends, which will have a substantial bearing on both customers and insurers. Non-traditional organizations are expected to integrate the insurance industry and make its proceedings efficient and effective across the insurance value chain.
Trends like cyber insurance, growth of peer-to-peer insurance, aerial and digital imagery, gamification, and customer adherence applications have a moderate-impact, but they will play a larger role in the future. As innovations keep occurring increasingly on these moderate-impact trends, they will benefit to set up new business avenues or to administer intensified customer service.
Below listed is the Insurance Industry Trends Revolutionizing the Industry
Future of Insurance through AI
a. Increased prevalence of physical robotics
The area of robotics has seen several impressive accomplishments recently in insurance industry trends, and this innovation will advance how humans communicate with the world around them. Additive manufacturing (3-D Printing) will thoroughly transform manufacturing and the economic insurance commodities of the future of insurance. By 2025, 3-D-printed buildings will be familiar. Also, programmable, self-governing drones, self-driving cars, independent farming machinery, and upgraded surgical robots will all be commercially feasible by the next decade. By 2030, the ratio of self-driving vehicles on the road could surpass 25 percent, which was 10 percent four years prior. Carriers will need to acknowledge how the growing presence of robotics in day to day life and across industries will transform customer expectations, and implement new products and channels.
b. Open source and data ecosystems
As data tends to become omnipresent, open-source customs will develop to ensure data can be distributed and used across industries. Several public and private bodies will come together to set up ecosystems to distribute data for numerous use cases under a common administrative and cybersecurity framework. For instance, Porting of wearable data to insurance carriers, and associated – home and auto data could be made accessible through Google, Amazon & Apple, and a variety of consumer-device producers.
c. The explosion of data from connected devices
In industrial settings, machinery with sensors has been ubiquitous for some time, but in the future of insurance, we will see a colossal increase in the figures of connected customer devices. The diffusion of existing devices (such as cars, home assistants, smartwatches, and smartphones) will go on to triple rapidly, accompanied by new, developing categories such as clothing, home appliances, shoes, eyewear, and medical gears. The emerging barrage of new data discovered by these devices will allow carriers to perceive their clients more profoundly, deriving in new product categories, more personalized pricing, and progressively real-time service delivery.
Insurers can take several steps to prepare for accelerating changes such as getting brilliant with AI-related trends and technologies, establishing and begin implementation of an intelligible all-inclusive data strategy, Spawning the appropriate talent and technology infrastructure.
Insurance technology trends involve the overlapping of various technologies, all in the name of revamping accuracy. Machine learning is technically a division of AI, but it’s more specific. Machine learning is set up on the concept that we can build machines to process data and learn on their own, without our constant surveillance.
With improving claims processing, Machine learning can also automate it. Files can be scrutinized using pre-programmed algorithms, upgrading processing speed and accuracy as well, when they are digital and accessible via the cloud. This automated analysis can impact more than just claims, it can be utilized for risk assessment and policy administration.
Most consumers don’t see any problem in sharing extra personal information if it means saving money on their insurance policies – and the (IoT) Internet of Things can automate much of that data sharing. Insurers can utilize data from IoT devices such as the distinct components of wearable technologies and smart homes to better determine rates, reduce risk, and even restrict losses in the first place.
IoT will strengthen other insurance technology with first-hand data, revamping the accuracy of risk assessment, and giving insureds more power to precisely impact their policy pricing.
Predictive analytics is practiced by many insurers to gather a range of data to recognize and predict customers’ behavior. Nonetheless, there are new techniques in which it can be utilized to revamp the accuracy of data.
Insurance companies can practice predictive analytics for:
- Analyzing customers at risk of cancellation
- Diagnosing risk of fraud
- Prioritizing claims
- Foreseeing trends
- Pricing and risk selection
- Identifying outlier claims
Social Media Data
Social media and its performance in the insurance industry is expanding beyond clever advertisements and marketing strategies. Mining social media data is revamping risk assessment for P&C insurers, strengthening fraud detection capacities, and facilitating exclusively new customer experiences.
Take the example of Dutch insurance company Kroodle, Its process of connecting with customers is managed via social media. Customers log in using their Facebook credentials, and they file claims, get quotes, and ask for other services also via the Facebook app.
Insurance technology can also leverage social media to inspect fraud. Insurers can check the social activity of insureds and correlate it to claims records, looking for any discrepancies.
Auto policies will persist to be impacted by telematics capabilities. In insurance technology, consider telematics as wearable technology for your car. Cars set up with monitoring devices, think Progressive’s Snapshot, measure distinct indicators such as data on speed, accidents, location, and more, which is all processed and monitored with analytics software to determine your policy premium.
The advantages of telematics are plentiful for both insureds and insurers. Telematics in P&C insurance will:
- Stimulate better driving habits.
- Reduce claims costs for insurers.
- Shift carrier to customer relationships from reactive to proactive.
It is estimated that 95% of all customer interactions will be powered by chatbots by the year 2025.
With appropriate use of machine learning and AI, chatbots can connect with customers seamlessly, saving time within an organization and conclusively saving insurance companies money. A bot can walk a consumer through claims or a policy application process, preserving human interference for more complex cases.
Geico’s “Kate” is a virtual representative that communicates with consumers via voice or text, assisting in coverage inquiries and policy questions, available 24/7. More insurance companies are investing in such technologies, and chatbot capabilities are predicted to increase in the coming years.
Insurers are taking to the sky, or at least their drones are. Unmanned drones are an insurance technology tool that will be practiced more by carriers in the future. They can be utilized across several stages of the insurance lifecycle, from calculating risk before issuing a policy to collecting data, assisting in preventative maintenance, and determining damage following a loss.
Farmers insurance is a major example for the same, as they deploy Kespry drones to assist risk and damage assessment on homes. These drones execute roof inspections and other judgments, and the drones transfer their data to the cloud for analysis. This is yet another example of IoT and other technologies working closely in the insurance industry.
The future of Insurance
What is the idea for the future of insurance customers? Consumers can hope for a smooth experience. Buying insurance and making claims through a smartphone application will be the pattern. Definite events will generate automatic benefit payments: for instance, a flight delay, or bags getting delayed. A travel insurance user can also expect the respective insurance company to track his lost bag over automated integration with the airline’s baggage system, adequately analyzing, calculating, and settling a claim before the policyholder has an idea about the problem!
Insurance recommendations will be more unified, even across distinct insurance types. Dog Owners who regularly walk for an hour every day, for example, will be provided with subtracted health insurance premiums and pet cover as well. It will be simpler to diagnose potential health risks to animals protected by pet insurance through understanding into data from millions of policies that are cooperating pet owners to prevent illness and not wholly cure it.
Personalized Insurance Policies in Future
Policies will be more customized: In some cases, people above the 70s strive to find low-cost healthcare insurance today, customized data on their deep-rooted wellbeing will be scrutinized, handing over a more bespoke and compatible insurance product.
The most productive technology classification accomplishes both, increasing data insight and the decline of manual intervention. Progressively new technologies like machine learning are facilitating businesses to automate developments to an extreme level than formerly thought was possible. Wholly digital insurance practice is expected to be five years away.
To Sum Up
Rapid advancements in technologies in the coming decade will influence disorderly variations in the future of the insurance industry. The conquerors in AI-based insurance will be carriers using the latest technologies to discover innovative commodities, harness subjective learning visions from new data sources, streamline proceedings and lower costs, and surpass customer expectations for individualization and vigorous conversion.
The transformation will hand over a more customized and compatible insurance experience to customers, driving customer loyalty, lowering cost and risk, and assuring that the industry can upgrade its prominence and deliver a tremendously more productive service to the public. Most necessary, carriers that adopt a point of view directed on inventing opportunities from disruptive technologies rather than considering them as a hazard to their current business will prosper in the future of the insurance industry in the new decade.
Also read, The Role of Big Data in Insurance Industry
Read full magazine : The 10 Elite Insurance Companies of 2020