3 min read
If insurance was to look into a crystal ball and ask what 2020 held for it, do you know what it would see?
‘Disruption.’
Change, transformation, growth, shifts- all of the uncomfortable but crucial processes.
But why exactly? Which trends are responsible for this disruption and why? How will the insurance industry change under their effect?
Having eased into 2020 and traversing its second month, let’s explore all this in today’s blog post.
The sun is setting on the age of one-size-fits-all insurance products. Consumers demand personalised products that cater to their problems instead of being another commodity for a business to sell. On-demand and usage-based products will become more relevant.
As such, peer-to-peer insurance, microinsurance, toffee insurance (yes, it’s a thing! See here), and flexible coverage options will increase in popularity. They’ll especially suit the wander-lusty and free-bird spirit of millennials which is the largest demographic in the world today.
The common thread through the upcoming products? The dominance of digital and automation.
Being an insurtech company ourselves, we can attest to this fact- insurtech is definitely on the rise. Investment in insurtech startups doubled from $1.65 bn in 2017 to $3.18 bn in 2018. [1]
It’s not just from the point-of-view of improved customer service that insurtech partnerships are beneficial. They also help to enhance in-house efficiency. More and more insurance companies are recognising this fact and either building in-house technological capabilities or partnering with those who offer them. Companies in the auto, homeownership, and cyber insurance realm are already enthusiastic players in this realm.
In truth, it is a win-win situation. While insurtech companies will get to fulfil their purpose, traditional insurers will benefit from the updated tech culture and newer revenue models. One company at a time, the insurance industry will be revolutionised.
If we can have robotic assistants for home care, why not for life care?
Bots will become more and more commonplace as time progresses. Companies are already enthusiastically using them for reducing customer service and claims processing time.
It was Zurich’s chatbot, Zara, which helped Anne, an 81-year old, to get immediate assistance during the Beast from the East. In the USA, an auto insurer’s virtual assistant supports operations by answering customer questions about policies and payments.
Everywhere you look, insurers are taking up technology and tech wizards are crafting it to disrupt outdated and slower ways working.
The creation of AI-driven and automated technologies will also lead to another result: more data to analyse which will help to enhance operational efficiency plus customer understanding.
The data for analytics will be derived from wearable devices, insurtech mobile apps, and the IoT. connected devices and wearables will be a boon for property and physical goods insurers since they’ll be able to extract real-time and accurate data about the loss.
The mobile-enabled insurtech apps will help to gather data about customer behavior and interactions. This will help them help to build models and profiles which will aid in speedy decision times owing to pricing accuracy through predictive analytics.
The Spixii chatbots have an analytics add-on which collects structured data to be analysed. We share insights with the client so that the client can use the data for risk management, policy framing, responding to exceptions, optimising business strategies, and identifying future growth patterns
If anyone has been keeping track of the tech space even a little bit, they’ll know- blockchain is the new kid on the block that is promising revolution and disruption. It allows secure data management across multiple platforms and stakeholders without loss of integrity. Moreover, it is decentralised- the feather of glory in its revolutionary crown.
In the realm of insurance, the usage of Blockchain can range from identity management, fraud management and underwriting to claims processing and reliable data availability. The technology, when leveraged here, would reduce operational costs.
Additional benefits include smart contracts and Decentralized Autonomous Organizations (DAOs) in policy management.
We welcome these changes in the insurance industry because they’ll ensure its future health and longevity. Plus, customers will continue to be adequately served and protected. Isn’t that what this is about?
[1] Fintech Global