Are we living in a world science fiction writers imagined decades ago? Whether you agree to that or not, technology trends in the insurance industry are bringing about seismic changes.
For example, drones, real-time data sets, and satellites are giving insurance companies visibility into the risks around facilities, leading to better accuracy. Claims processing after natural disasters are poised to become fast, scalable, and automated. And in auto insurance, the risk is shifting from human drivers to the software and AI controlling self-driving cars.
All these changes are within our reach – the technologies for them already exist. It is not unreasonable to propose that such offerings could become mainstream in the next ten or twenty years.
So what are the technology trends in insurance that are, either individually or in tandem, changing the face of the industry?
Top 5 Technology Trends in Insurance
From disrupting conventional underwriting processes to leveraging Artificial Intelligence (AI), insurance companies are harnessing technology trends to leap ahead of their competition and meet the changing needs of stakeholders and customers.
However, the prevalence of new and advanced technologies opens the possibility of facing increased competition from start-ups and greenfield insurance. To thrive in such an environment, established insurers will have to mould themselves according to a new world, from their operating models to their products.
Leaders and managers need to understand the impacts and risks of these technologies and make sure that their companies are prepared to utilize them to reach their full potential. This will involve abandoning outdated business models and perceptions and embracing modern ways to operate.
Leveraging the Potential of Artificial Intelligence (AI)
When used properly (and ethically), AI can provide insurance companies with increased efficiency and better decision-making. The potential of AI is undisputed – however, it would be unwise to ignore the questions surrounding its trustworthiness.
AI, if configured improperly, can lead to poor results. For this reason, AI should be used for predictable, repeatable tasks that can be handled by automation and AI tools. Humans can focus on intervening and adjusting in cases that are more sensitive.
Furthermore, it is best to use robust, proven AI tools. For instance, CrushErrors is a patented reconciliation technology that is designed to reconcile vast amounts of data.
While many companies are experimenting with using artificial intelligence, few of them have scaled their capabilities. As AI becomes more refined, organizations will be able to redefine core processes to be more streamlined and predictive, as well as create new products and services based on data analytics.
The Rise of Embedded Insurance
Embedded insurance brings coverage directly to the customer at the point of sale. It is offered with the sale of third-party services and products. Examples include travel insurance when booking a flight, host protection and guarantee insurance provided by Airbnb, and coverage offered by car rental companies while renting a vehicle.
Expect embedded insurance to be one of the primary technology trends in the insurance industry. The embedded insurance market is expected to grow to 722 billion USD by 2030, and within that timeframe, up to a quarter of all personal line-premiums could be generated via embedded ecosystems. The percentage could cross 30% for auto.
Carriers are given access to entirely new customer pools. This is done by combining offers with the purchase of consumer products at the same moment that customers are likely to buy coverage.
Immersive Internet is the Future
The internet isn’t done evolving.
One of the tech trends in insurance is immersive internet (or immersive web), wherein humans represent themselves on the internet using digital avatars. This technology blurs the line between the digital environment and the user’s physical reality.
Immersive internet could enable insurers to provide better lifetime value and more outcome-oriented consumer interactions.
Insurtech refers to technological innovations that are developed and implemented for use in the insurance industry. It affects administration, creation and distribution. Key applications of insurtech include customer identity verification, smart contract formulation, claim management, payment processing, fraud detection, and risk prevention.
Since the insurance industry is well poised to utilize innovative and disruptive technology, venture capitalists have become interested in insurtech.
Insurtech can help large insurance companies explore non-traditional options, such as social insurance and dynamically priced policies based on customer behavior and market conditions.
A Trust Architecture allows trusted data to flow through a service-oriented system via a framework.
Insurers often handle sensitive customer information, and ongoing changes in the market will require customers to share even more such information with carriers.
Trust Architectures will help carriers to manage risks and utilize complex customer data in a secure, consistent manner. It will also simplify matters such as identify verification and management.
These technology trends in the insurance industry could alter core functions and products. For instance, many human workers could be removed from warehouse operations due to automated warehouses. This would change the focus and nature of workers’ compensation coverage.
Who will be winning insurers in this new landscape? Experts predict that they will be open to disrupting their own services and products, improve and increase their tech talent, and focus on relevant tech trends.
All this will take a considerable amount of time, effort and resources. To help ease the load on your employees, NextGen Accounting provides credit card reconciliation services, bank reconciliation services, audit and anti-fraud assurance, financial consulting, and financial reporting. Our services are specially tailored to firms with vast amounts of data that are extremely difficult to reconcile.
To give you the fastest and most accurate reconciliation, we use our patented software CrushErrors, which you can also obtain as a product if you’d rather conduct reconciliations in-house.
NextGen Accounting’s management team has decades of experience and includes former executives of Barclays Bank, Bank of America, and ICBC. Contact us today for reconciliation solutions or book a free demo if you’d like to get CrushErrors!