New technological advancements can lead to improvement in efficiency, customer service, data collection and more. Although some people believe the insurance industry is lagging behind other industries in terms of innovation, that’s not entirely the case. “Insurtech” is a term being used to describe the new technologies that are aiming to modernize the insurance sector.
Apps and Mobile Technology
Smartphones and nearly constant internet access have allowed for more consistent communication with a wider audience of insurance customers. For example, apps and text messaging can be used to inform people of important reminders and updates to their insurance. In addition, people nowadays have a camera on them at all times, which wasn’t true a few decades ago. This means they can snap pictures of any damage that needs to be sent to their insurance company, making the claim process quick and efficient.
The purpose of blockchain is to provide a shared, encrypted database of information and transactions. It’s projected that executives in the insurance industry will be doubling their blockchain investments this year. There will be obstacles to overcome in the implementation process, but blockchain shows promise for increased transparency, accountability and security, saving time and money while also improving customer satisfaction.
With AI, algorithms are designed to achieve specific tasks, and these machines can often “learn” on their own. This eliminates the need for a programmer to consistently add new code and information. AI research is being done in fields like reasoning, natural language processing, planning, and more. In the insurance industry, this technology is often being used for quotes, calculating policy offerings, monitoring, and understanding client needs.
The Sharing Economy
Services like Uber, Lyft and Airbnb are household names in today’s society. However, these ridesharing and homesharing services are commercial, thus requiring certain insurance. There have been major improvements in the insurance coverage recently, but there are still unique challenges. For example, there is a potential gap in commercial coverage for an Uber driver where their personal auto insurance may need to cover an incident.
Research shows that millennials prefer digital solutions for all transactions, including insurance. As this age group is now one of the largest in the United States and many are entering their highest consumption period, we must make their needs and preferences a priority. However, we must do this while still remaining accessible to the less tech-savvy older generations who may be less likely to adapt to (and trust) widespread changes in the industry.