Technology and the Insurance Industry

Innovation enabled by merging technologies is driving change in the financial sector. The insurance industry is no exception. New technology supports new methods of insurance service provision and fraud detection. In particular, technology-enabled data collection can enhance risk identification and mitigation measures.

Traditionally, insurance company operations and technology have operated independently. Insurance marketing, underwriting, and claims drove operations, while technology facilitated employee efforts. The situation is changing quickly. “InsurTech” describes the new technologies revolutionizing the insurance sector and transforming the industry’s regulatory practices. Several broader technological innovations and developments underpin many changes brought by InsurTech.

Mobile technology and apps have profoundly changed the face of insurance. These technological devices have allowed many insurance companies to target and reach bigger audiences than ever. Smartphones allow insurance companies to dispatch short messages to customers. Also, customers can access insurance packages through mobile devices, reducing the cost of insurance agents and brokers.

Eventually, technology may take over most traditional insurance operations. More insurance companies are channeling more resources to software-as-a-service (SaaS) applications. The goal is to sidestep complex and often expensive core information technology systems.

Today, insurers are using SaaS for HR management and commission processing. Technological applications also offer flexibility that minimizes manual work. For example, artificial intelligence (AI) will enhance insurance distribution, underwriting, and claims processes. In auto insurance, for instance, risk will shift to the AI software installed in many vehicles, including self-driving cars.

As AI becomes more prevalent, insurance carriers can re-engineer their core processes to be more predictive. Also, as cloud technology matures, many core systems will help insurance companies to be nimbler when launching new products and promote better customer service.

Drones and satellites, backed by real-time data, give insurance companies unprecedented insights into the risk around structures, facilitating greater accuracy during insurance assessments or claims. Claims processing, particularly after natural catastrophes, can be automated and expedited faster. In addition to reengineering core processes, insurance carriers and industry players can leverage AI to create better products based on data analytics.

The insurance sector is using telematics, apps that merge telecommunications and informatics to enable the wireless sharing of information. Already, many new cars have built-in telematics devices that track driving habits and pass them on to insurers. The data is monitored and processed using analytics software to determine suitable insurance policy premiums.

The impact of the Internet of Things (IoT) on the insurance sector cannot be ignored. Many consumers willingly share personal information that can save them money on their insurance policies. The IoT can automate the gathering of such data. Insurers can leverage data from many IoT devices, including wearables, smart home components, and automobile sensors, to mitigate risk and determine appropriate premiums.

For example, IoT can enable real-time monitoring of facilities or equipment and promote proactive maintenance and prevention. Similarly, 3D and 4D printing can potentially transform claims processing and enhance customer experience.

The role of social media in the insurance industry has evolved beyond eye-catching insurance advertisements and marketing strategies. Social media data mining is improving risk assessment, augmenting fraud detection, and creating innovative customer experiences.

from WordPress https://ift.tt/fpB1nJE
via IFTTT