What is Insurtech?
Insurtech —short for “insurance technology”—is an extensive category of constantly changing technologies used in the insurance industry. In essence, Insurtech encompasses all technologies used by insurance companies to enhance the efficiency of their operations. Just like with every other industry, the insurance sector is becoming more technologically advanced by the day.
More insurance companies are building ecosystems, big data or mobile applications, and the internet of things (IoT) solutions, and for a good reason. The cumulative result of having digital accelerators is allowing insurers a noticeable ability to increase revenue even in challenging markets.
The U.S. property/casualty industry grew its net underwriting income by 28% in the first six months of 2021 compared with the same prior-year period. According to a new AM Best report, a 5.4% growth in net earned premiums and 55.3% decline in policyholder dividends offset increases in incurred losses and loss adjustment expenses and underwriting expenses, leading to the underwriting income increase.
What are Some Insurtech Trends?
Insurtech technology entails an array of accelerators within robotics process automation (RPA) and intelligent automation (IA). These solutions enhance efficiency, reduce costs, workloads, and stress while enhancing the competitive edge of insurance enterprises. Fundamentally, they are revolutionizing the customer experience because processes are faster, more customized, and accurate. Whereas the primary benefits of using RPA and IA for insurtech operations are bringing excellent results, the following trends are underscoring these results even more:
Insurance Risk Assessment
The insurance business would make no sense if all products were sold to consumers as a one-size-fits-all. The products need to be tailored to meet each consumer’s unique needs. For instance, the premiums paid by high-risk customers shouldn’t be similar to those paid by low-risk customers.
This is where enhanced risk assessment capabilities come in. Artificial intelligence (AI) and Machine Learning (ML) allow insurers the ability to detect risk factors in enormous data sets. By using analytics technologies during the underwriting process, underwriters are able to differentiate between customers on the grounds of their risk profile quickly and accurately.
Customized Insurance Products
By collecting and activating the right data, insurers can build products that customers actually want. The process of creating customized products is simple with AI and ML. Indeed, automated systems collect and analyze data for each customer, precisely identifying needs and allowing the construction of more personalized policies and pricing models.
IoT and Insurtech Integration
Given that the new IPv6 protocol can accommodate more information and an enormous number of IP addresses, insurance networks can connect every insured object through a network database. This capability allows insurance companies to leverage automated technologies to build transparent, real-time systems to track assets and create time-efficient applications. Below are examples:
- An IoT device integrated with the fire or burglary alarm
- An IoT sensor system that can track activity in a commercial office at night
AI-powered Insurance Chatbots
E-commerce websites often use chatbots to address general queries. These chatbots usually have a limited script of common questions and answers. As such, they make customers feel like they are talking to a machine.
AI-powered chatbots can improve on this by helping customers navigate the purchase and claims process and providing advice on reducing premiums, among other functions. Moreover, AI chatbots can help insurance companies reduce costs—they can complete the end-to-end process without human intervention.
Insurance Regulations Technology
Given the high speed at which insurtech is advancing, insurance companies cannot afford to fall behind on their compliance and regulatory requirements. Insurance products that were previously deemed unimaginable in the real world a while back have not only been developed but are being consumed by customers. That said, such products are strictly tested and keenly monitored to ensure that they meet the insurance regulatory standards. RegTech (Regulatory Technology) was developed to help insurance companies comply with industry regulations as well.
The U.S. insurance industry has both modern and traditional users. However, modern insurance companies are gaining an edge over traditional ones. By not embracing RegTech, modern companies could not only lose an edge in the marketplace but also risk being non-compliant.
Getting started with OZ’s Insurtech
There are numerous ways to leverage RPA and IA effectively in your insurance business practice. These include: customer service, invoice processing, claims processing, underwriting, sales orders, payrolls, price comparisons, processing refunds & cancellations, and storing customer information.