The insurance industry is being disrupted by an influx of new technology.
Artificial intelligence-powered chatbots. Wearables and telematics. Omnichannel customer interface and suite-like data sharing. These are becoming the norm as the industry digitizes internally and externally. 2019 will be a year of transformation in insurance, as companies invest in new insurance software and consumers embrace digital experiences.
The internet of things will be the largest disrupter in the market for personalized insurance products. People are already taking out personalized insurance policies thanks to IoT-connected devices and sensors capable of monitoring and transmitting real-time data about insured assets.
Eventually, IoT-connected sensors inside or attached to the body may transmit real-time health data and biometrics to insurance providers. Premiums would automatically rise or fall depending on the health of the insured. If a person’s blood pressure rises, for instance, they may have to pay more for their premium. These systems, while scary-sounding at first, may end up pushing the insured toward healthier living. Actuary tables, which assign premiums to people based on statistics about their demographic health, are simply less accurate at assessing health.
On the property side, physical assets can much more easily be assessed using current technology. Insurance providers are using telematics for vehicles to measure and assess asset health, as well as that of the driver, to dole out premiums based on actual data.
The rise of wearables, sensor information-based premiums and the like call for data-driven actuaries and underwriters who look at markets as a whole. Armed with the vast amounts of data that wearables capture, they will be tasked with writing in the rules to deliver the premium prices for insurance products on offer.
There are a ton of insurtechs focused on internal efficiency and enhancing the ability of insurance providers to handle claims, find and secure new business, and improve their overall customer experience by digitizing the majority of operations.
Between the insurer and the insured, however, lies a lot of opportunity for enhancing the customer experience. There are several insurtechs focused on driving easier and better choices for customers looking for doctors in network, for instance.
The more self-service options for insurance customers, the better. About 80% of insurance customers are willing to conduct multiple transaction types via digital channels. As customers switch to digital interactions with their insurance providers, the onus shifts to the provider to create well-crafted digital experiences.
Customers want to interact with their provider wherever they are, be it on mobile, desktop or elsewhere in the digital landscape. While the option to speak and conduct business with an actual person remains important, allowing customers to handle nearly all of their business via self-service digital options will become increasingly key to acquiring and retaining customers.
Chatbots for use in customer service have become ubiquitous in many industries. Customers looking for quick answers to questions can lean on these AI-powered digital assistants to grab information quickly and without human assistance. Insurance companies have been investing in chatbots at a rate far greater than other industries.
Chatbots, which learn from interactions and have access to a large repository of company- and industry-related information, can help customers avoid confusion caused by ambiguous industry jargon. Depending on their level of efficacy, these bots may also handle simpler transactions and policy updates without using a human agent. All of this serves to reduce the need for human customer service, and the policy agents who historically handled requests from policyholders. Chatbots can also aid in the sales process as a lead-generation tool, funneling qualified leads into insurance agents’ CRM, along with the context of a particular conversation to streamline the selling process.
These trends won’t all affect the insurance industry the same way. The key to success lies in the connection of these seemingly separate portions of a provider’s business. Ensuring that data-sharing is optimized across departments, and internal processes are fueling efficiencies internally and externally for customers, is crucial. Creative use of the massive amounts of data gathered by wearables and other sources will be key to staying ahead of the curve when it comes to product offerings and tapping into previously untouched markets. Small business will be a key market segment for property and casualty providers to target as micro policies and ultra specification become possible at scale.
The future of the insurance industry is tech-heavy. We look forward to seeing how these predictions pan out as the industry invests more heavily in digital experiences for both customers and internal teams. With trillions of dollars paid out in premiums every year in the U.S. alone, the insurance industry represents one of the largest opportunities for tech companies big and small to make significant impact and gather large swaths of market share.
Interested in insurance technology? Check out our guide on insurtech!
Patrick is the manager for the verticals and tech teams as well as G2's fintech and legaltech analyst. As a G2 analyst, Patrick focuses primarily on the fintech and legaltech spaces in addition to a slate of other vertical categories. Fintech's explosion in popularity has created a compelling challenge to accurately represent the spaces on G2 and produce high-quality, relevant content for external consumption. Patrick leverages his relationships with vendors, the unique data that G2 has accrued via more than 1 million user-generated reviews, market surveys, and product data to produce insightful reports and thought leadership content within his two focus spaces.
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