Historically, insurance is an industry based around people and relationships. Insurers learn to understand their policyholders, while customers make claims when they need help the most. The digitization of business and customers’ desire for digital experiences changes these relationships. Customers want on-demand underwriting and claims services, and insurers want to increase revenue and mitigate fraud risk. To maintain a competitive edge, organizations in the insurance industry need to adopt new technologies that help them drive revenue while reducing the cost of claims. As a result, understanding technology trends in the insurance industry can achieve both goals.
10 insurance industry technology trends
The insurance industry revolves around calculating customer risk profiles, and this mentality often extends to how it approaches technology investments. By assessing the value a technology trend can provide, insurers can make informed decisions about what best works for their organizations.
1. Increasing accuracy with predictive analytics
An insurance company’s actuaries specialize in mathematically measuring risk so that the company can set premiums effectively. The rise of big data and data analytics enable actuaries to more precisely analyze statistical trends that impact the company’s potential financial outcomes.
The data-driven insurance industry can leverage predictive analytics to:
- Identify current and future business insurance needs
- Forecast risk factors for different business lines or verticals
- Gain visibility into potential business customer insurance cancellation risk
- Recognize patterns across claims types
- Find new customer opportunities based on trend analysis
For example, the rise in ransomware attacks over the last year led many insurers to increase premiums or draft new exclusions because they were able to quantify future trends using predictive analytics.
2. Improving efficiencies with Artificial Intelligence (AI)
Insurance agencies and companies use AI to improve underwriting and digitize claims cycles. Supporting AI with sensors and Internet of Things (IoT) devices enables insurers to monitor, prevent and mitigate risk more effectively. Within the AI algorithm, they can define thresholds that trigger a proactive response, like pre-filing claims or sending automated inspection alerts.
Insurers can also use AI to auto-generate large loss reports sent to their reinsurers to streamline their own claims processes and recover losses faster.
3. Automating processes
Automating processes also improves efficiencies. For example, insurers can automate claims with document automation with cloud-stored files. As a result, claims handlers can spend more time focusing on issues that require human interaction, such as complex claims, contested claims and negotiations.
4. Optimizing customer experiences with insurtech
Insurtech can provide better customer experiences by enabling greater visibility into the underwriting and claims processes. For example, insurers can customize policies or offer pay-per-mile car insurance. Connecting digital eClaims processes, customer relationship management services and online policy purchasing using insurtech APIs, gives insureds a way to easily submit and obtain the information they need.
5. Optimizing policy pricing with telematics
Telematics, or the IoT sensors in cars, help insurers optimize policy pricing. Collecting data like driving speed, location and accidents gives insurance companies qualitative information that drives better premiums and lowers claims costs.
6. Building trust with blockchain data
Blockchain is a peer-to-peer, distributed record ledger that helps protect sensitive information by assigning each “block” of data a time and date stamp. It then adds new blocks every time an update is made. Blockchain builds consumer trust by giving insurers a way to protect data and track changes made to it. This ensures data integrity while providing a way to protect confidentiality and availability.
7. Validating claims with social media data
Insurers increasingly use customer social media account information to help verify identities and activity. Insureds can use their social media account information as a single sign-on to access their accounts for filing claims or getting policy quotes. Meanwhile, insurers can review a customer's social media activity as part of their investigations so they can validate a digitally submitted claim. For example, if someone posts on a social media feed that they have been in a car accident, then the insurer can use this to support the filing.
8. Saving time and money through chatbots
Chatbots offer another use case for AI that enhances customer experiences. Through a chatbot interface, customers can ask common questions about the claims filing or policy application process. Customers can get real-time answers to their questions while employees can focus on more complex tasks.
9. Empowering business stakeholders with low-code tools
As customers want more digital experiences, many insurers are moving away from cumbersome, internally designed applications. Low-code configuration tools enable business stakeholders to implement better user interfaces without waiting for the IT team. This increases time-to-market and gives different departments the ability to customize applications for their customers’ needs.
10. Shifting to the cloud
Digital transformation in the insurance industry focuses on using cloud-based technologies to provide better customer experiences that reduce insurer overhead. The same technologies that save insurers money also provide on-demand customer service that increases loyalty. Customers don’t want to sit on hold waiting for a customer service representative, especially in the aftermath of a car accident or natural disaster.
Cloud-based, customer-facing technologies mean that customers can connect with their insurance company in real-time, which streamlines the insurer’s processes leading to better customer service by reducing the claims cycle timeline.
Online notarization services enable insurance technology adoption
Digital transformation is the future of the insurance industry. However, many business processes require insurers to collect notarized documents. For example, a total loss auto claim requires notarized documentation transferring the title to the insurance company.
Notarize offers 24/7 online notarization services provided through a secure platform that streamlines claims processes and reduces cycle time. Insurers can use the Notarize platform to provide their customers with a quick, completely digital way to get required documents notarized. Customers upload an electronic document, confirm their identity using a government-issued photo ID, connect to a live, commissioned notary via secure video call and download the notarized document.
As part of the digital transformation strategies of insurance companies, insurers can use Notarize to build the notarization process directly into their workflows to provide better customer service and reduce employee time spent on manual tasks.