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Technology Redefining the Future of Insurance

By Harprem Doowa, CEO & Co-Founder, frank.co.th

Harprem Doowa, CEO & Co-Founder, frank.co.th

A lot has been mentioned and discussed when it comes to AI, IoT, Chatbots, Drones, Blockchain, and Cloud in regards to the Insurance Industry. But I believe we’re still far away from all that can be developed, understood, and applied with these technological tools.

We know that some carriers already employ some of these tools, and we see that they are becoming more and more commonplace throughout the industry. There’s no rocket-science reason for this, except for that these tools make it easier for customers and insurance providers.

Insurers are looking for a competitive edge, and so they consider embracing one or more insurance tech trends to better their service for the customer. At the end of the day, these tools are supposed to help make processes more efficient, deliver precisely what the customer needs, and provide accurate and reliable information.

Tech has shaken up the Insurance Industry by making it so seamless and straightforward to get insurance quotes just by a click of a button, or having the ability to manage coverage through an app. But there is no limit to how far InsurTech can go.

I think the biggest potential for the insurance space would be to use AI to replace actuaries as AI can process more data from multiple sources and calculate premiums for customers on an individual level. This is still a long way out as it requires insurance companies to put the backbone of their company, which is the pricing of its products, at the hands of a computer.

It’s understandable why some companies are hesitant. Security is essential. Privacy is vital. However, sometimes, if you don’t proceed with the evolutionary innovations that are inevitable, you fall behind. Additionally, we know that consumers are already willing to share extra personal information if it would mean that they would save money on insurance policies. The Internet of Things (IoT) automates most of this sharing by using IoT devices found in “smart homes” or wearable technologies to determine rates, prevent losses, and mitigate risks. It’s getting first-hand data right from the source, which improves the accuracy of assessment, giving power to insurers to better their policy pricing.

"Insurers are looking for a competitive edge, and so they consider embracing one or more insurance tech trends to better their service for the customer"

And, this is just IoT. Other insurance technologies exist and are poised to mature even more in 2020.

Speaking of 2020 and how technological tools have transformed the Insurance Industry; let’s think about predictive analytics. Predictive analytics is used by insurers to collect a variety of data to understand customer behavior. But that’s not all. It can be used for pricing, risk selection, and for identifying the risk of fraud or customers at risk of cancellation. It can also trigger claims and anticipate trends. Imagine all that can be known and all that can be done by understanding the behaviour of your company and your customer. It would revolutionize the way insurance works.

And why stop just there?

With AI, you can create a personalized experience every customer desires. By creating unique experiences and meeting the demands of modern customers, not only do insurers succeed, but the customers are satisfied. I believe that the whole point of these technological tools is to improve, to better, to fix and resolve. You might ask: why fix something that isn’t broken? But, I question: why not better something that can be revamped, refined, improved?

If you could have accurate reporting in seconds, improve claims turnaround cycles by automating it, identify and assess emerging risks, or identify new revenue sources, reduce human errors, automate processes, wouldn’t you?

In fact, with machine learning, which is the idea that you can build machines to process and learn data on its own without constant supervision, all this is possible. Or at least it will be.

Insurers are always looking for ways to improve claims processing. Machine learning can improve it by automating it. When files are digital and accessible in the cloud, they can be analyzed using pre-programmed algorithms. This not only speeds up the process but maintains accuracy and can be used for policy administration and risk assessment.

Insurance technology trends in 2019 have already included overlapping technologies, all in the name of improving experience, accuracy, and functionality, and that’s only going to continue into 2020. However, I will add that not all of these technologies and changes will be for the better - it depends on how it’s used.

A lot of the technological advancements in insurance rely on one concept. More data = better. At what point is the balance reached with the amount of data a customer is willing to give an insurance company versus the amount of data the insurance companies need to give you a more dynamic and personalized insurance experience and coverage. The data required to improve, risk assessment for P&C insurers, identifying fraud, and enabling new customer user interface, can sometimes be very intrusive and private. This is a decision that only consumers can make and will dictate how far insurance companies can use existing and upcoming technologies to further their ambitions.

In the end, I believe that technology will continue to shake the industry for the better, but only if and when used correctly and appropriately to resolve existing problems and to better the experience for the customer, all while making the customer feel that they are not being invaded upon.

Weekly Brief

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