Technology Trends Disrupting Insurance in The New Normal & Way Forward
Content with legacy models, insurance leaders appeared as late adopters of the digital boom that has resurfaced with digital transformation and evolution of disruptive digital technologies - led by artificial intelligence, data analytics, predictive modelling, blockchain, Internet Of Things, intelligent automation and machine learning. However, the need to meet the increasing demands of digital customers, challenges of delivering personalized customer experiences, new age tailor-made services and the spur of Insurtech companies are leading to dramatic changes that are reshaping the insurance industry.
Just as COVID-19 has forced insurers to adopt remote and digital ways of working, so it is undoubtedly set to drive a wider acceleration of technology adoption across the industry. This is a trend, of course, that has already been with us for some years: but the current situation will significantly expedite it.
-KPMG (COVID-19 puts insurers on the fast-track to technology adoption)
The need to be digital-first and customer-centric has swept the entire insurance landscape and the thrust towards digital transformation has been accelerated during the pandemic led lockdown. With so much at stake, global insurance market will witness a game-changing course correction to redraw the boundaries in the new normal and demarcate the contours of business-as-usual. New business strategies and focus are to be driven by new set of customer expectations, new market scenario, growth of insurtech firms, operational roadblocks, continued growth of data and new developments around Blockchain, AI, Analytics and automation.
Let's take a look at the top Insurance Technology Trends that are changing and will transform The industry in new normal.
Insurtech Partnerships To Become Imperative in the post COVID world
The new generation of digital-savvy customers (Millennial and Gen Z) have always been pushing businesses to transact, communicate and deliver through online channels and digital platforms but the new push for digital by the current pandemic is bound take the demands for digital delivery of services and support on a new high. It is here InsurTech companies have already taken the lead by designing and delivering user friendly, modern and powerful applications that offer seamless and intuitive digital experiences. These rising user-friendly firms have helped customers with dynamic or on demand policies and lower premiums which has led to significant growth of InsurTech firms in the areas of auto, home and cyber insurance.
All this calls for insurance leaders to capitalize on the gains of these firms by either acquiring the new innovations or partnering with these InsurTech companies. Such a collaboration will become imperative in times to come and will turn to be mutually beneficial for both Insurance leaders and new InsurTech firms as traditional insurers will find them accelerating towards the new tech culture and digital revolution and the InsurTech firms will find new access to funds, larger customer base and rich domain expertise. So, insurance leaders in near future will not see the InsurTech firms as threats but opportunities to grow in an evolving market scenario.
Connected Device, Data & Advanced Analytics
Data Analytics and predictive modelling has a huge potential for insurers to improve nearly every aspect of their business from risk assessment, premium calculations, claims assessments to claim settlements. Insurers are thus making significant investments in advanced analytics and this has been accelerated with the availability and abundance of data now sourced through Internet of Things (IoT), wearables, mobile applications, social media channels, drones and other connected devices.
Wearables are helping insurers with data that helps them to analyze the real-time movement, physical activity, monitor health and mortality risk profile. They are uncovering new insights on mortality risk of individuals and help insurers tailor life insurance premiums according to the risk and behavior of each individual. These wearables find high appeal amongst the Millennials who are tech-savvy and expect personalized experiences. Connected devices (IoT), drone and imaging technologies are helping insurers with data that can help them assess risk, ascertain damage and settle claims. With smart devices market to expand in the coming years, new streams of data will help insurers have deeper understanding of their customer risk profile, their own risk exposures, curate competitive premiums and identify growth opportunities. Incorporation of automation technologies, artificial intelligence and machine learning can help insurers to deliver at a faster speed, have a more granular view and at a much larger scale.
Blockchain Technology to Become Mainstream
Insurance sector has often been easy target for online frauds in the past. Blockchain with its ability to detect fraud and prevent risks helps insurers in optimizing efficiency, security and transparency. The distributed ledger technology offered by Blockchain technology is helping insurance companies drastically in streamlining claims processing, securing operations, speeding up payment times and securing online transactions.
Blockchain with its ability to process huge volumes of customer data in real-time is a natural candidate for deployment in insurance industry. Issuance of insurance policies with smart contracts powered by Blockchain helps in management of claims in a manner that is transparent, responsive and hassle-free, leading to efficient and streamlined claims processing and an improved customer experience. Adoption of blockchain technology by insurers will certainly be a trend in the times to come as the technology evolves with even more empowered and demanding customers.
Omnichannel and Personalized Products- Rising Gen-Z customers
As the customer expectations evolve, the world embrace digital-first approach and Generation Z continue to rise as a percentage of customers, insurance companies need to ensure that they are digital-ready and upbeat with modern technologies. Insurers would need to provide seamless omnichannel access as modern customers seem to use cross device and cross channel purchase path before making the final click. Insurers will need to provide simplified products, spelt out policies, and relevant offerings that are personalized to their preferences in order to meet the expectations of the new Gen-Z customers. Policy details and conditions must be communicated through everyday language and graphics that are relatable to the new customers with the ability of completing the end-to-end customer lifecycle in few clicks.
The trend in the insurance certainly is about being digital-first and leveraging the modern innovations around IoT, Data and Analytics, Blockchain, artificial intelligence, machine learning and automation. In times to comes, insurance industry will see a rise in adoption of blockchain technology for more safe and secure transactions and increasing partnerships with InsurTech firms.
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