Technology Trends that are redefining the Insurance Industry
Technology is disrupting all industries, and it is leaving significant footprints in the insurance industry too. Here are 5 technology trends that are impacting the insurance industry.
Human lives and businesses are constantly surrounded by risks and uncertainties. The insurance industry plays a vital role in mitigating these risks and enables smooth functioning of an economy. It is a complex industry that covers a wide range of risks and is governed by numerous laws and regulations. Although these factors have led to a rather slow evolution of the insurance sector, it has come a long way. Innovations in the marketplace, technology advancements and digital interactions are transforming and modernizing the industry.
Technology is both streamlining insurance business processes and enhancing customer experience, leading to a dramatic overall improvement in the way the industry operates. In order to sustain and grow in a rapidly digitizing world, the insurance sector needs to adopt emerging technologies and redefine their ways of operation. In this article, let’s take a look at the top five tech trends that are shaping the future of the insurance industry.
Artificial Intelligence is a disruptive technology that is impacting all industries across the globe and insurance is no exception. It is gradually seeping into almost all aspects of the insurance sector, adding value to the business processes.
Today, machine learning algorithms are being leveraged in evaluating risks and identifying suitable insurance offers for customers. Enterprises are also combining AI with core activities such as claims processing and underwriting to enhance efficiency and achieve greater accuracy. AI-driven chatbots are allowing insurance companies to serve and support customers better with smart, human-like interactions.
Big Data and Advanced Analytics
It’s the era of big data. Insurance companies accumulate chunks of data from individuals and business houses on a daily basis. This voluminous data becomes difficult to store, manage and analyze in the long run.
To manage big data efficiently and make sense of silo data sets, insurance companies are now upgrading their data management systems and leveraging the power of analytics. Big Data technology stores and retains huge volumes of structured and unstructured data. Analytics enables businesses to arrive at meaningful and actionable insights. It also allows businesses to offer personalized insurance offers, and drive profitability in business.
Cloud Computing is turning out to be a game-changer in the business world due to its prominent features like cost-effectiveness, high security and easy deployment. Several insurance businesses are now shifting towards Cloud platforms to run and manage day-to-day business activities.
Today, wide-ranging processes including premium billings, claims processing and policy management can be carried over the Cloud resulting in huge cost savings on servers and technical support staff. Adopting Cloud technology helps insurance providers gain operational efficiencies at lower costs and with less manual intervention.
Blockchain is a Distributed Ledger Technology that is cryptographically protected with digital signatures. All transactions carried on a Blockchain platform are highly secure and traceable at each point. The insurance sector has begun to use Blockchain for client validation and identification of fraudulent activities, like false claims and approvals.
Transactions involving high-cost assets are tracked and validated on a distributed ledger, and the identity of a claimant is verified using trusted identity providers. The integrity of Blockchain technology helps minimize counterfeiting, double booking, contract alterations and fraudulent claims. It also brings about higher transparency and security in the overall insurance journey; right from client onboarding to policy management and claims processing.
Internet of Things
The era of smart objects has set in, and the insurance industry is making the most of IoT in driving business profits. Insurance providers are now developing creative and tailored insurance solutions for IoT-driven products such as self-driven cars and connected homes.
With the help of sensory technology, huge volume of data is collected from IoT-driven devices. Analytics helps in deriving actionable insights from this data and offering personalized solutions to customers. For instance, insurance providers are using data collected from wearable health and fitness devices to offer tailored health insurance products to users.
The insurance sector is subject to a complex infrastructure and legal restrictions. However, with disruptive technologies like these, it has grown and modernized to a great extent. Admittedly, the industry is still in a nascent phase of digital transformation. The future of insurance enterprises now depends on how open they are in embracing latest technologies and keeping up with changing times.