Top 7 IT Trends in Insurance in 2020
The insurance industry is entering an era of digital transformation. Today, IT trends are the driving force in the insurance market, allowing to successfully interact with increasing demands and customers. Easy access to technologies for most people allows them to enter various services, including insurance. It includes the sale of insurance services online, flexible pricing mechanisms, analysis of customer behavior, providing personalized offers and much more.
There are a number of difficulties and challenges on the market, which also have to be overcome with the help of information technologies. Insurance infrastructures are quickly accepted in advanced countries. Businesses are trying to update complex legacy systems and provide new ways of engaging with the client, not giving up the old concepts.
In the last three years, insurtech funding has increased by 60% in the US (from US$1.46 billion to $2.44 billion according to CB Insights), while it’s more than tripled in Asia (from $140 million to $506 million).
DigitalSuits helps insurers develop and implement strategies that increase profitability and efficiency, leverage digital capabilities, improve customer loyalty and gain a competitive advantage from advanced analytics. Therefore we have analyzed the top 7 emerging technology trends in the insurance industry that are going to step up this year. They will help vendors stay on top of the competition and satisfy both business and customers’ needs.
1. Higher Efficiency in the Insurance Industry due to Machine Learning & Automation
Artificial intelligence (AI) is rapidly becoming a game-changer technology in the insurance industry. Insurers investigate its potential and meet head-on with its risks. Insurance Governance Leadership Network (IGLN) participants broadly agree that despite the potential for hype or unrealistic expectations, the impact will be significant.
AI and machine learning are going to solve business challenges across the insurance value chain. These include underwriting and loss prevention, product pricing, claims handling, fraud detection, sales, and customer experience. Also, AI solutions can make it easier for customers to interact with insurance companies.
Some insurance companies have even started employing drones for automated property and claims assessment.
2. Blockchain Insurance Technology
Current trends show that blockchain in insurance has great potential in upcoming years.
Blockchain uses advanced cryptographic techniques to create a secure register of information that prevents unauthorized modification, addition or removal of data.
It promises cost reduction and efficiency. Blockchain might also enable revenue growth, as insurers attract new business through higher-quality service.
There are at least three ways to use the blockchain that open up new growth opportunities for insurance companies: improving customer interest, offering new cost-effective products for emerging markets, and developing insurance products related to the Internet of Things. The key to success lies in creating a reliable distributed platform for direct work of clients with their personal data, collective insurance policies, and smart contracts.
3. Cyber Security Coverage
The cybersecurity threats that insurance companies face are growing at an alarming speed. Every year, companies lose about $450 billion when cyberattacks steal information and break into digital systems.
Cybersecurity insurance is a product that is offered to individuals and businesses in order to protect them from the effects and consequences of online attacks. This product is a recognition of the inherent dangers of storing customer information online and the risks businesses face in this online age.
Insurers must constantly invest in security and innovations in order to prevent potential attackers. Early detection is critical. Otherwise, a cyberattack may go unnoticed for weeks. Effective and quick detection will help determine the source of the attack, the target systems, the degree of damage and the cause. The threat can be neutralized before the damage can be done. There is a wide range of software solutions that provide threat detection in almost real-time.
4. All-in-One Insurance Policy
Another important trend is the all-in-one trend, which allows you to get any insurance product in one place. The actual implementation of this trend is the emergence of online aggregators, such as RiskMarket. The user trusts the brand, which transparently and reliably builds a search-clearance-purchase system and gets used to navigation on the site. User does not need to spend time studying sites and visiting the offices of insurers. All offers are collected in one place and are formed specifically for the user’s request. On the one hand, the buyer is not limited to the choice of an insurance company.
5. Insurance Industry Value Chain Automation
Consumers interact with corporations via technology on a daily basis, allowing consumers to experience personalized services at an unprecedented level of detail. These experiences lead insurance subscribers to expect a similar level of personalization. The customer demand for automated solutions is a considerable factor in favor of the decision. They want a purely digital experience that does not require human contact for effectiveness and simplicity.
Digitization of insurance will lead to the release of human resources in the insurance segment, and, most importantly, to reduce the cost of the insurance product.
6. Internet of Things (IoT)
IoT increases the interdependence of industries, which stimulates the introduction of new insurance solutions due to the need to cover risks arising from the use of technology.
Insurance companies will carry out not only quantitative but also in-depth qualitative analysis of data on insured objects. Companies will be able to rely on statistics when assessing risk and directly model potential risks. The introduction of the IoT technologies will contribute to the development of new insurance products, services, and working methods.
With IoT security, systems provide such functions as calling emergency services and interacting with systems of insurance companies. That is, fire, flood, penetration into the room — all risks can be prevented, which means that losses are minimized.
7. Telematics
Insurance telematics is actively gaining popularity in the modern world. This special monitoring system is an opportunity to reduce the cost of a policy for an individual driver. A monitoring device installed in the car interior encourages the driver to drive carefully. As a result, the risk of accidents is significantly reduced, which means that insurance payments will not be required. It provides tangible benefits for both parties, therefore, insurance companies and car owners are equally interested in it.
The driver only needs to agree to the installation of a telematics device in the car interior upon the conclusion of the contract. At the same time, a special application is additionally installed on the driver’s mobile phone, which allows him to monitor the transmitted information.
Wrapping Up
IT innovations are being introduced to the insurance market in recent years. With the digitalization of the entire economy, a new spiral is emerging in the development of relations between the insured and the insurer. The need to expand the electronic distribution channel not only through a computer network but also through other telecommunication systems, like mobile applications, will create entire insurance stores. Online sales will significantly increase the availability of insurance services, raise the service of insurers to a qualitatively new level that meets the modern requirements of the financial market.
DigitalSuits always search for the latest and greatest developments in insurance technology to deliver the experiences customers expect in the modern market. Ιf you are interested in discussing these trends in more detail or need help implementing them, please contact our team. We are always open to communication. 2020 will be a very interesting year to watch for insurance technology developments. Follow us to discover our real cases implemented in the Insurance segment. And find out how our experts help companies increase efficiency and lower costs, and better meet customer expectations. Stay tuned!
