Usually people associate technology changes more with banking sector. about insurance? Global insurance market is valued at $5 Trillion. How the
people use insurance and even think of it have undergone a tremendous change.
The expectations are different and so is the service catalogue from the
providers. How is the technology shaping up the industry?
Here are 3 important changes driving this sector.
All encompassing digital transformation – New models /
Personalization
Like any other industry, this has shaken the leaders as well
as laggards. No one could afford to be complacent. The overall impact is very positive for both the organizations as
well as the customers. Customers’ expectations are changing: They expect very
specific bouquet of services, expect services anytime anywhere and through any
channel. EY estimates that 80% of customers want better communication with the
insurance organizations. And this communication has to work seamlessly across channels!
Big Data And Analytics will play a huge role. Are today’s
insurance organizations equipped for collecting all data online and real time?
Have they made changes to their organizations as well as the processes in order
to make use of the data? Can they offer a single user based insurance and
personalized premium based on the data available online? What are the ways to
collect data in order to get a competitive advantage?
If 80% of the premium is lost due to distribution costs,
imagine the power of digital models. Perhaps they will make the intermediaries
redundant in the entire value chain. APIs will redefine insurer-insured-InsurTech relationships.
Insight-driven offerings will be the buzzword! An insurance company, in Europe,
partnered with Panasonic. The latter’s sensors provide alerts to both the
insurer and its customers using which issues are resolved quickly. Drones are
here to stay and will become increasingly used for many purposes. Some of them
are assessment of property damages, accurate estimation of property, analysis etc.
In order to assess Hurricane Harvey’s damages and settle the claims faster,
leading auto insurers used drones. In Australia, many big loss claims were
settled within 90 days using drones.
Insurtech modernization
The system of records, especially the legacy systems, need to be transformed
and operating costs minimized. RPA (Robotics Process Automation) and SaaS are being
extensively used. Many companies buy products and customize them so much so that
it loses the product flavour. This can only increase the costs of maintaining
such systems. Companies are looking at standardization as a means to cut costs.
Some of these are likely to encompass the following:
- AI and automation to cut down costs
- Focused application for digitalized customer experience and focused approach to problem-solving.
- Implementing a global Blockchain for a more secure and safe information sharing channel.
Partnerships
The collaboration between insurance and InsurTech firms will
happen faster. The result will be new revenue models, higher profitability and
reduced costs. If we look at the InsurTech firms’ growth, it happens in almost all
the areas such as auto, cyber security, home etc. These call for increased
technology capabilities which may be difficult to develop by the traditional
insurers or would take a longer lead time. The latter is not acceptable in the competitive
world. This could even be a win-win for both. Reaching out to large customers
could become easier using InsurTech companies.
References
https://riskandinsurance.com/5-tech-trends-for-insurers-to-watch-in-2019/
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