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The insurance sector may have been a little slow to the party when it came to embracing modern technology, but we are beginning to see insurtech trends emerging across the industry.
Insurance technology is gradually being adopted across the globe to improve services and streamline businesses - to the benefit of both the insurer and their customers.
Let's take a look at five key ways that technology is changing the insurance industry in 2020.
One of the most important and nuanced processes in the insurance industry is that of predictive analysis; compiling data to conduct risk assessments and produce fair insurance quotes for thousands of individual customers.
As the technology of predictive analytics improves, it can be used for a wider range of purposes than simply predicting customer behaviour, including fraud risk analysis, triaging claims, identifying customers who may cancel or not renew, and anticipating future trends.
What's more, as time goes by many of these processes are possible to automate thanks to machine learning.
As artificial intelligence improves and machines become more adept at processing data and learning new information, it's possible to automate more aspects of the claims process in order to reduce time spent making and assessing claims for both the insurance broker and the customer.
Automation can be used to streamline every aspect of insurance, from risk assessment to policy administration.
It's already clear that the insurance industry as a whole is moving away from 'one box fits all' insurance policies and towards personal policies designed around the individual.
Surveys conducted by PwC have revealed that half of customers are willing to share more personal data if it means getting a tailored insurance deal, and no doubt this figure will rise further in coming years as the practice becomes more widespread.
Technology is paving the way for brokers to observe and assess relevant individual behaviours accurately and efficiently.
Cars equipped with telematic monitoring devices can provide reliable information about a customer's driving habits, including speed, location, and accidents, in order to offer context-specific car insurance quotes.
Drones can be used to observe buildings and land before carrying out risk and damage assessment for both buildings insurance and farmers insurance policies.
Observational technology is a two-way street. Customers frequently use social media to voluntarily share information about themselves, and this is a further source of data for the tech-savvy insurance broker.
And thanks to the Internet of Things, more and more data sharing is automated by devices such as wearable smartwatches and smart home devices, which can help to provide accurate and up to date information about both an individual customer and emerging trends.
Of course, social media has traditionally been used as a platform for B2C communication between service provider and customer, and this is no different in 2020.
Today, social media can not only be used to answer customer queries but in some cases, it is being used to conduct the entire policy and claims process. This is the case with Dutch insurance company Kroodle, whose customers can now get quotes and file claims all via the company's Facebook app.
There are two other key ways in which the insurance sector must continue to lean upon technology to effectively communicate with customers; the first is the increasing prevalence of live chatbots, with some studies predicting that 95% of customer interactions will be powered by chatbots by 2025.
Chatbots are popular with customers as a quick and easy way to get answers to simple questions, and they streamline the customer service model for providers too.
Finally, this year we are seeing a big push towards mobile app use as customers seek a simpler point of contact with their insurers. Mobile apps can also be a useful source of data collection if used correctly.
Insurance brokers naturally collect and store sensitive information about customers, and the secure storage of this data should always be a top priority.
Modern security measures such as Intrusion Detection Systems and Intrusion Prevention Systems are developing every year to keep up with the threat of cyber attacks, and security audits can now be at least partially automated using AI.
Technology can also aid insurers in assessing and mitigating the risk of fraud. Predictive analytics are improving fraud risk identification, and social media has also proved to be invaluable in both fraud detection and investigation.
Insurtech can be used to mine social media accounts for data pertaining to claim records, for example analysing social activity on the day of a loss to look for possible discrepancies or disputes.
Blockchain technology also shows promise as a solution to security worries and fraud identification in the insurance industry. Insurance policies can be issued and encrypted using smart contracts to increase efficiency, security and transparency.
While the use of Blockchain in the insurance sector is still in its infancy, the Blockchain Insurance Industry Initiative is currently involved in building Blockchain apps for the industry and the technology's uptake will no doubt increase exponentially over the coming years.
Many of these changes amount to one of two things: improving the products and services offered to customers or streamlining the policy and claims process for both customer and broker.
As artificial intelligence becomes a key component of insurance companies around the world, business models can be optimised for cost and time efficiency and these savings used to improve staff satisfaction and reduce customer premiums.
One simple way that insurers can adopt hi-tech practices without overhauling their entire business model is by using artificially intelligent insurance software.
At Artificial, we've designed leading insurance software which utilises cutting edge AI and machine learning technology to streamline data collection, risk assessment, and policy management.
For more information about our frictionless AI insurance software or to request a demo, please get in touch.