Technology and Innovation: How Insurance is Evolving (and the Opportunities that Exist for IT Professionals)
by Sharon Hoffman
As a tech professional, right now the world truly is your oyster. Your skill set means you are in very high demand and it’s an exciting time to be in the tech industry due to the rapid pace that new developments continue to occur.
So what is happening in insurance tech at the moment and what makes it such an attractive sector to be involved in?
Dramatic change is occurring in the insurance industry. It is being led by exciting technology developments that are reshaping the way insurance companies do business and allowing them to be far more customer-centric.
The key drivers of this change are occurring across four key developments, which are shaping the insurance industry now and into the near future:
- Big Data and analytics
- AI and automation
Customers want personalised products and services. People will always prefer tailored insurance coverage rather than being forced onto the one-size-fits-all products that have been offered in the past.
Digital models allow this to happen as they can provide on-demand and usage-based insurance products. This includes personalised premiums, flexible coverage options, micro-insurance, and even peer-to-peer insurance options. Lifestyle apps are also reimagining the insurer-insured relationship, engaging customers more effectively and giving them improved user experiences and access to the policy information they need.
Big Data and analytics
Big Data driven APIs are enabling the creation of insights-driven offerings by integrating data from multiple sources. A deeper understanding of customer behaviours allows for more accurate risk assessments, reduced false claims, and better long term value and brand loyalty.
By enabling usage-based insurance, this has led to reductions of around 40% in both claims and policy administration costs. This leads to lower acquisition costs and allows insurers to offer their customers more competitive and sustainable policies.
AI and automation
AI technologies help reduce paperwork and the need for brokers as well as providing crucial tools in helping to minimise fraud.
Bots will continue to become more mainstream for both front and back office tasks. They can automate policy servicing and claims management for faster and more personalised customer service. Automated bot agents can interact with customers via preferred mobile apps or messenger platforms to help guide customers towards the most appropriate policies.
Advanced drone and imaging technology is also being utilised to give insurers access to high definition imagery to remotely conduct property estimates or view real-time conditions. After a natural disaster, the Australian insurer, QBE, was able to settle 90 per cent of big loss claims within 90 days in large part through the deployment of drones. As the company reported,
“Drones offer immediate access to areas affected by catastrophic events such as earthquakes or floods, allowing us to provide early assessment of the extent of damage.”
The ability to process huge volumes of customer data in real time across a range of insurance functions is a great challenge. This needs to be coupled with a secure system that allows for the transfer and visibility of data across multiple stakeholders and organisations. Blockchain technologies hold the key to addressing these challenges.
Blockchain provides the benefits of secure data management across multiple interfaces with total transparency. It can be highly useful across a range of tasks including identity management, claims processing, fraud management, and data accessibility. Coupled with low operational costs and smart contract capabilities for improved policy management, blockchain will continue to transform insurance in the coming years.
The next step
It is undoubtedly a transformational time for the insurance industry, led by some very exciting tech-driven developments. If you like the sound of the enormous opportunities currently available for tech workers in insurance, get in contact with us here at Ensure.