The insurance scape has been seeing digital transformations for several years now and there’s always new technology on the horizon. While these new avenues are usually explored years later and only with a goal to catch up with trends, putting some early thought into them can bring advantages.
The rift between agencies driving insurtech and conventional ones is also growing deeper. Adopting innovative tech into insurance digital solutions can be a useful tool to improve customer experience and business processes. According to McKinsey, nine out of 10 insurance companies identified legacy software and infrastructure as barriers for digital transformation.
Relevance of insurance digital solutions
While that’s the case with insurers, Price water house Coopers’s COVID-19 Consumer Insurance and Retirement Pulse Survey (https://www.pwc.com/us/en/industries/financial-services/library/insurance-consumer-survey.html), carried out in 2020, had shown that as customers looked for alternate ways to update accounts or renew policies, online options came up short. The survey results also showed that among customers who had issues with their insurance providers, 41% would likely switch from providers lacking digital capabilities or insurance digital solutions. As much as 15% of the consumers also identified digital incapability as the topmost cause for dissatisfaction with their insurer.
In our earlier blog Tech takeaways for insurers according to an analyst (https://blog.aspiresys.com/insurance/tech-takeaways-insurers-according-analyst/), analyst Patrick Van Brussel had mentioned “Amazon generation”. “We’re all being merged into one unique “Amazon generation,” expecting the immediate delivery of any kind of tailor-made goods and services enabled by emerging new technologies such as data analytics, predictive modeling, artificial intelligence (AI), natural language recognition, or bots,” Van Brussel had said about customer expectations. When traditional channels shut down because of the pandemic, 19% of customers said they anticipated more interaction with their insurer through video chats with agents or chats via a website. They also planned to make more use of email and, especially for younger users, mobile apps, the PwC survey said. So, getting innovative isn’t going the extra mile anymore but essential.
Now that we’ve made the advantage of insurance digital transformation clear and put it in context, let’s look at ways innovative tech can be used in insurance.
RPA & AI/ML
For claims automation: Having claims management software cuts the manual work needed, and the time taken to process the claim. But the insurer also reduces labor costs via automation and the insured gets the claim payment quicker, heightening the customer experience. Automated claims processing can also save a lot of hassle for both the insurer and the insured by handling the interactions and document exchange needed between the parties and healthcare professionals. Claims automation would involve AI-powered image recognition software that can scrutinize documents submitted for claims.
For underwriting: Paperwork, manually written notifications, follow-ups, and underwriting are usually boring to do. With automation, insurers can cut cost and time spent on such routine and/or repetitive tasks and give space for employees to focus on value-addition. AI-powered automated processes will also make the process more efficient and boost productivity. This in turn leads to better revenue and/or cost savings. While AI-powered tech can require quite a bit of investment, RPA that doesn’t always include machine learning may require lesser spending and works fine to automate routine business processes.
RPA can be weaved into your InsuranceSuite with Guidewire automation service providers. Rules engine that is part of the services rendered further simplifies the underwriting process while claims can be automated from start – raising/registering a claim – to finish – automated claim settlement to the insured.
Internet of Things is part of everyday life and it’s time insurers took advantage of it. Data from wearables and other trackable devices can be used to assess risks. Underwriters will have access to the blood pressure, glucose, temperature and pulse numbers of the policy buyer to make a fair assessment. This cuts the need to run lab tests in moderate-risk cases, saving time and costs again. The data will also give the insurer an opportunity to offer personalized policies to consumers. This, apart from making the customers feel heard, will also help reduce pricing depending on their individual needs. This would work to great advantage in the aftermath of the Covid-19 pandemic which has affected the personal finances of many consumers worldwide. Hence, bringing IoT into the mix will help gain better customer satisfaction while saving costs.
There is a lot more to be explored with telematics in insurance. While the technology has been used by insurers to support and collect data about incidents, its scope can be further widened to predict risk patterns, assess risk quotient and cover risk analytics. For example, telematics can be used to collect data about a person’s driving. This can help assess the insured’s risk factor and probability of incidents. Sending out individual alerts in case of accidents or catastrophic events, driving tips, etc., can further enhance customer safety and customer satisfaction. Looking for help to see how you can boost your insurance digital transformation and these modern technologies in your business? Get in touch with our team of insurtech experts.
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Read our other Blogs:
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