Near Term Capabilities Versus Futuristic Opportunities
As we progress through the years, technology is shaping how we conduct day to day businesses and daily activities. One industry that is feeling the impact of changing technologies is the insurance industry. Near term capabilities of these technologies within the industry are; omnichannel distribution, increased use of big data and analytics and technology to boost cybersecurity. Futuristic opportunities for insuretech include; using blockchain to create smart contracts, use of open source data and use of cognitive technologies to reduce time spent when handling certain processes.
Below you will is a deep dive into our research.
NEAR TERM CAPABILITIES
Technology will help insurers decide on personalized plans for their clients. Today’s consumer is pickier and choosier, partly due to the array of options they are offered. They desire plans and offers that suit their individual needs. They also want communication that is personalized and tailor-made to them.
Mobile channels will ensure that insurers are able to communicate with potential clients in real time and answer their questions immediately. Insurance agents and brokers will have access to better data and tools on their portals that will increase customer satisfaction and make them more competitive. Omnichannel distribution ensures that claims are resolved faster at lower costs due to operational efficiency.
Snapsheet has provided a cloud-based claims processing system. This system allows insurers to make their claims through the Virtual Insurance Claims Exchange platform and this has improved and hastened the claiming process for insurers.
BIG DATA AND ANALYTICS
Data and analytics is one of the major trends in technology today. Insurers are finding ways to leverage data to gain key insights into their clients. Sensor technology is set to change how the industry operates through its use of big data. Telematics is used to record drivers' driving patterns and this helps change their behavior. Sensors that monitor environmental conditions can be used in buildings and in-homes and will change how people file claims and how insurers award these claims.
Big data can also be used to improve customers' experiences by improving usage-based insurance. Usage-based insurance utilizes recorded data to tailor make functions and services based on individual customers. It is set to revolutionize pricing and improve profitability by being stronger at identifying risks.
Flock is using data and analytics to insure drones. By leveraging data that can predict risk and conduct risk analysis from information from their customer database, it is able to advise clients on how and when to safely fly their drones.
Cyber-security was the biggest concern in the industry in 2018. The number of big cyber-attacks have increased over 100% since 2015. This has greatly increased the demand for cyber-security insurance across all industries but more so the healthcare sector and large retail chains. Key insurers are leveraging the use of blockchain to reduce these risks and reduce the insurers' liability.
By using these technologies, insurers can help individuals and protect their important data and maintain their reputation. The Insuretech field is the best way to protect insurers as well as their customers. Global insurance-broking company Marsh is working to create a start-up that tackles the issue of data safety. The start-up is set to use blockchain to ensure that companies can accurately handle verification without handling sensitive personal data and information.
Blockchains are already thought of when talking about security and data protection. However, blockchains will be used for a myriad of reasons, one among them is to create smart contracts. Smart contracts will be created once certain terms are fulfilled, therefore, causing certain actions to be taken. Smart contracts are to be stored in blockchain, therefore, actions on these documents will be incredibly difficult to manipulate and to hack.
Smart contracts will be used to respond to claims instantly, as well as to adjust rates and premiums based on the terms set for the insured and by the insurer.
USE OF COGNITIVE TECHNOLOGIES
Cognitive technologies and Artificial Intelligence is progressively becoming the future. They will use human beings' abilities to process and large and complex data streams faster and more easily. AI is currently being used under the supervision of human, however, experts predict that by 2025, technology will be able to stand on its own.
Cognitive technologies will be able to accomplish tasks such as fastening claims processing. It is said that in 2030, advanced algorithms will be used to handle claim insurance routing in an efficient and more accurate way. Claims by small businesses and individuals will nearly be completely automated and this will enable insurance companies to have a straight-through-processing rate of 90%. This alone will reduce the time taken to process from days to hours and even minutes.
The process of underwriting will also be reduced to a few seconds in 2030. Underwriting will be done by machines and deep learning models. These models will use internal data and external data that will be accessed programming interfaces and data and analytics providers.
USE OF OPEN SOURCE DATA
With the over-reliance on big data in today's technologies, open source protocols will be created and this will enable data to be shared across industries. The public and private sector will join hands to create a conducive environment for the sharing of data. This ecosystem of shared data will increase the need for a common regulatory body and cybersecurity system.