How will Insurance Industry survive?

This article is part of The Future of Insurance -LinkedIn’s Newsletter Series, authored by Dogan Kaleli. Click here to subscribe and get updates on the technology, customer & employee experience, future of insurance industry and trends!

As the insurance industry grows and sustains itself in a rapidly digitizing world, it’s adopting emerging technologies and redefining how it operates. These adoptions of technology continue to streamline the processes and improve the customer experience, leading to significant changes in the way the industry operates and the ability to modernize and transform.

When it comes to shaping the future of insurance, there are some main trends in terms of technology that colleagues within the insurance ecosystem should be definitely aware of. I wanted to start with this article talking about these different technologies and give a flavor of them on a high-level. In the next editions, you will see real use cases and how exactly you can implement these technologies in your day-to-day and how you can benefit from them;

Telematics

Telematics is a term that combines the words telecommunications and informatics to broadly describe the integrated use of communications and information technology to transmit, store and receive information from telecommunications devices to remote objects over a network.

Telematics systems are used usually to make vehicles safer and cheaper. This is just some of the areas that insurance companies need to explore to really help solve the real problems facing customers. New insights must be translated into new offerings and services, and new technologies such as connected devices, smart cars, and smart insurance must also become part of customers’ daily lives. All these new insights, whether they are connected or not, must be translated into new insights, which will lead to better customer experience, tailor-made products, and growth in terms of premium.

Data Analytics

While the use of data analysis is certainly not new for insurance companies, they are now using data-driven solutions to provide their customers with new types of products in the shortest possible time. Dr Indranil Nath from DXC Technology says “data has formed the basis of insurance for more than 1,000 years”, and as the world adopts digital capabilities, the insurance industry is leveraging data analytics to improve process efficiencies, speed, and service quality. Of course it is not only the insurance companies; the brokers and agents are playing an important role in selling new products such as “smart” products (i.e. smart car insurance, smart home insurance), and taking the lead in many digital initiatives to boost the customer experience through investments, acquisitions, strategic partnerships and innovation labs.

Cloud Computing

Cloud computing is the delivery of computing services-including servers, storage, databases, networking, software, analytics, and intelligence-over the Internet (“the cloud”) to offer faster innovation, flexible resources, and economies of scale. You typically pay only for cloud services you use, helping you lower your operating costs, run your infrastructure more efficiently, and scale as your business needs change.

Cloud computing is changing the game in the business world and is one of the most important technologies for the insurance industry. The adoption of cloud technology helps insurance providers achieve operational efficiencies at lower cost and with fewer manual interventions. Several insurance companies are shifting their business processes such as risk management, risk analysis, claims management and compliance to cloud platforms. These far-reaching processes can now be managed more efficiently and cost-effectively, resulting in lower costs, faster response times and better customer experience.

Internet of Things

The internet of Things ( IoT), is a system of interrelated computing devices, mechanical and digital machines, objects, animals or people that are provided with unique identifiers (UIDs) and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction.

The age of the smart home, car and other “things” has begun and the insurance industry is using it to drive up profits. IoT-powered products such as self-driving cars and smart homes are currently being developed by insurance providers or partners; and opportunity is huge for all stakeholders thanks to the controlled devices and collecting big amounts of data from them with the help of sensors. Health insurance providers, for example, use data from portable health and fitness devices to offer tailored insurance products to their users. Analyses help to derive actionable insights from the data and to offer customers personalized solutions.

Blockchain

Blockchain is a distributed ledger technology that is cryptographically protected with digital signatures. All transactions processed on a blockchain platform are highly secure and traceable at all times. There are so many benefits for all stakeholders, unfortunately it requires a great attention to understand what it is and how it works exactly. For more details on this, you should check out this video later.

The insurance industry is starting to use blockchain to validate customers and identify the best insurance policies for their specific needs, such as coverage and limits. But most importantly it brings more transparency and security for the entire insurance industry, from on-boarding the customers to handling claims. The integrity of blockchain technology helps to minimize the risk of fraud, as well as to reduce the cost of coverage. Transactions involving high-cost assets can be tracked and validated in a distributed register. Recipients’ identities can also be verified by a trusted identity provider, such as a third-party identity management system.

IMPORTANT: Another technology, and a very important one, is Artificial Intelligence (AI) which I will be focusing on the next article and provide real use cases.

The emergence of technologies like these presents a huge opportunity for insurance companies and brokers to collect and exchange data about customers, identify new business opportunities and customize the consumers’ experience.

A recent Accenture report found that insurers that deploy smart solutions to reinvent the customer experience and drive collaboration between people and machines are generating ten-fold returns on their technology investments. If you know what your goals are, #fintech and #insurtech are one of the great success stories of this trend, as insurers harness the power of technology to meet their customers’ expectations.

As customers’ needs evolve, we can create the kind of customer experience that encourages loyalty and recommendations, ultimately leading to more sales, retention, and consistency.

We are seeing the ever faster and more extensive change and upheaval in the insurance industry. From where the industry stands today and where it needs to jump into the future, these technology changes will shake up and redefine the industrial and business world, including the insurance industry. We see that digital technologies transform the insurance business. This means that more and more customers regularly review their insurance requirements. Leading the way and adopting the technologies of tomorrow is the only way insurers can remain relevant in 2020 and beyond. They have an opportunity to gain market share through innovation, although they need to be open to innovation and make sure they select the right partners and digital technologies to transform their business.

My last thought is that to avoid negative disruption and to remain agile, we need to make sure that leading technologies must merge with existing business models to create new technology-driven disciplines, to improve the customer experience and to reduce administrative costs.

Where do you see your company in this “digital movement”? Have you already taken steps to create technology-driven disciplines? What have been the first areas of focus?

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#Insurance #Innovation #Technology #DataAnalytics #Telematics #Blockchain #Cloud #InternetOfThings #FutureOfInsurance #Leadership

Originally published at https://www.linkedin.com and authored by Dogan Kaleli.