Insurance Industry - Trends 1
After searching extensively, our team determined that two trends around the technologies and future capabilities shaping the implementation of claims management in the US insurance Industry are AI/ML and the IoT. We resolved this as the case after analyzing various industry databases and credible media sites such as Digitalist Magazine, McKinsey, Property Casualty 360, Insurance News Net, Forbes, Internet of Business, and more which presented them as the key trends. Some US companies implementing these trends include
ARTIFICIAL INTELLIGENCE (AI) AND MACHINE LEARNING
AI and ML are predicted to impact the future implementation of claims management. Today, insurance companies are investing heavily in AI/ML related technologies, which have increased more than five-fold since 2000, according to a Stanford University study. Another study, the 2017 Global Trends report, reveals that this sector invests an "average of $124 million per company in AI—$54 million more than the average across all other industries." In the future, ML systems will have advanced to simplistic operators and will be able to assess the impact of damage to predict the cost of repair and weigh hundreds of claims against each other to determine their qualification index for instant settlement. Additionally, ML will allow insurers to streamline claims audits and put them into critical stages of the claims process, "including investigation, evaluation, and settlement" thus enabling insurance firms to prevent claim leakage and overpayments before money leaves, according to Insurance Innovation Reporter. In addition, AI will be used in the future to automatically and swiftly, by referencing with various systems in mere seconds, to detect potential frauds and trends.
Lemonade Renters Insurance, a New York-based insurance tech company, has developed an AI/ML system that assists the firm to manage claims faster and provide customers with fast pay-outs.
Another insurance firm, Elafris has partnered with several insurance companies including Nashville-based Jupitor Auto Insurance Co. to leverage an AI-driven platform that helps customers to check the status of their auto claims and make monthly payments.
THE INTERNET OF THINGS (IOT)
Tomorrow's insurance leaders must prepare for the adoption of IoT for claims management. According to The Balance, a database of industry experts' opinions, it is the "biggest trend impacting the insurance industry in the coming years." The IoT market is expected to grow at a CAGR of 65.89% between 2016 and 2022 to reach USD 42.76 billion with North American share of the industry at 45%. In the future, the large amounts of data generated by IoT will enable insurers to speed up claims management and offer tailored customer service. For example, as sensors become commonplace and widespread in the home, IoT will be frequently used to proactively monitor water and temperature levels to alert both the insured and insurer of issues before they arise. Insurance firms will also be able to monitor vehicles in real-time using integrated IoT and telematics to observe how policyholders are driving, "such as the speed they travel, the amount of sharp braking, how quickly they take corners, the time when they drive, and a whole host of other factors." With this information, they can help modify driving behavior by sending frequent advice to the insured and reward or penalize good and bad drivers respectively by lowering their premiums or charging additional costs, sequentially.
"P&C carriers are also utilizing phone apps and automotive systems that furnish crucial information for automating and quickly closing claims shortly after accidents."
State Farm uses the Drive Safe & Save telematics programme, a smartphone, and beacon that reports to the insurer exactly how the driver of the insured vehicle is driving or the driving habits in general. Disciplined drivers, those who drive safe, could save up to 50 percent on their annual policy.
Lastly, Liberty Mutual has partnered with Google’s Nest to "implement connected smoke alarms in the home, enabling customers to reduce the risk of a fire, and in turn, reduce their home insurance premiums."