Have you ever struggled to verify your insurance claim status? One always forgets about insurance until we need it, just like spare tire or tools. That’s the reason why National Insurance Awareness Day is celebrated every year on June 28th. However, the origin of this day is a mystery; what is known is how insurance plays an important role in our lives by protecting us from the severest of blows by inopportune events.
In today’s digital world, about 60% of consumers prefer to monitor their insurance policy using enhanced digital tools. The shift toward a protective business model is virtually unavoidable as technology becomes more connected and smarter.
Smart technological start-ups are concentrating on changing the face of the insurance industry; a change many agree is necessary to enhance this sector. This is the time now that a new technology must enter the insurance sector to recreate an insurance ecosystem. Also, take advantage of enhanced technical capabilities to offer advanced experience to both providers and clients. Nevertheless, the use of new-age technologies such as the Internet of Things (IoT) and artificial intelligence (AI) into the insurance sector is booming the industry. And there it is, the rise of “InsurTech,” an innovative way to speak to the patrons and offer coverage at a lower cost.
InsurTech – upcoming digital revolution in insurance industry
Insurtech is a blend of two words called “insurance” and “technology,” which is inspired by the term “FinTech.” It was first described by Investopedia as augmented technology designed to squeeze out investments and productivity from the existing insurance industry model.
The insurtech surge does not only stand for technological innovation in the conventional industry but also brings into view entirely new business models like microinsurance or peer-to-peer (P2P) insurance.
So, this “National Insurance Awareness Day,” let’s find out the next big thing in the InsurTech industry.
Insurtech covers a wide range of functions from front-to-end operations within the tech-minded insurance organizations, or it can be restricted to one or more components of the insurance value chain. For instance, Brolly is an AI-driven app offering coverage advice for personal line products in the UK. The advice is mainly given on one specific area of the coverage value chain called distribution.
Emerging InsurTech trends for 2020
Artificial intelligence (AI) and automation
AI and automation have transformed almost every sector across the globe, and naturally, the insurance industry is no exception. The use of AI in the claims process has brought advanced quality and an easy go process for handling coverage (e.g., Shift Technology). AI algorithms can protect millions—from lost to fake claims—by searching for data and detect errors and trends.
Machine learning (ML) is exclusively used in detecting cross-selling opportunities and assessing risk. For instance, ZhongAN, China’s first online-only insurance technology firm, uses big data, AI, and ML to streamline coverage, price risk more finely, and propagate revenues to a mass market through the cyberspace.
The future is absolutely touchless!
Use of blockchain technology helps to enhance the consumer experience by eliminating the submission of zillion documents (e.g., KYC) and save their time. This automating technology not only reduces admin costs but also enhances consumer engagement by automatically validating health and policy records and consumer identity. For instance, Zurich, Aegon, Swiss Re, Allianz SE, and Munich Re introduced B3i, a blockchain insurance industry initiative eager on developing trading policies across the entire insurance value chain. The technology is also used to detect frauds.
Virtual reality (VR)/augmented reality (AR)
VR/AR will offer an extraordinary experience for consumers by using innovative ways to interact regarding coverage services, products, and employee training. For instance, MetLife offers product information via AR videos. AXA industry uses AR apps to spread awareness about car accidents. Whereas, Allianz tells customers regarding home accident insurance using AR technology.
Chatbots will virtually assist clients and will offer the best policy according to their interests.
Social media and the internet of things (IoT) will rock insurance pricing with personalized products.
Social media and endpoint devices play an important role in providing huge personal data. The approach may help consumers and insurers to get better and cheaper coverage plan with personalized services. For instance, Beam uses IoT technology to provide dental insurance. An intelligent toothbrush tracks and collects data of consumers’ daily toothcare routine. Then the firm offers a personalized insurance plan based on teeth-brushing data.
It seems that the 21st century is fulfilling all the technological dreams using safer options like InsurTech.
It is one of the most disruptive business models that is quickly gaining popularity among consumers. In this type of insurance, people agree to cover related risks by forming a separate finance pool comprising their premium shares. The P2P doesn’t require insurance companies and conventional intermediaries. For instance, Besurance is the best example of P2P insurance. It is an insurtech risk-sharing platform that groups insurers by their risk resemblances. Claims are reviewed and accepted by community representatives.
It is a new trending technology in the car insurance sector to make car risk management better. Telematics insurance is a cluster of pioneering car insurance products that work similarly to black boxes. This telematics box is installed into a car that comprises analytics software, a GPS, a SIM card, and motion sensors. The technology helps to keep a track record of breaks, speed, driving distances, location, crash accidents, time, and others. For instance, the O2 app by the UK telecommunications company supports the idea and assists consumers by giving tips on enhancing their driving and minimizing risks.
Now we can surely say that InsurTech will rule the world. So, on this “National Insurance Awareness Day,” grab some technologically enhanced insurance policies and be a “TechInsurer.”
As you now know, almost anything can be insured, so, don’t forget to review your several protection policies to make sure that they are still shielding you and your family.
There is no question that 2020 has been a tough year for everyone across the globe. As the financial system begins to reopen during the COVID-19 pandemic, business holders must ensure that they have the proper insurance coverage in place. However, the year 2020 has seen a rapid rise in the digitization of the consumer experience.
Thus, the rise of the digital era for insurers begins.