Ease of insurance purchase with technology

By Insurance CIO Outlook | Monday, October 08, 2018

Insurance companies can effectively minimize security risks utilizing digital technology, using big data from customers, from several sources.  Using technology has an impact on product design and the efficacy of inclusive insurance delivery, according to a report.

Health information forms a critical part of risk assessment in life insurance and the health and fitness of the insured can be determined from a person’s health indicators like heart rate, exercise habits, blood pressure and other information acquired from wearable devices. These metrics can be of great assistance in the assessment of life insurance risk where insurers can develop models based on the wearable data throughout the life cycle of the insured. This implies that the usage of wearable’s data can be critical in health insurance.

By reducing costs, the reach of annuities, pension, and life coverage can be extended through digital technology into largely untapped areas such as younger and lower income segments. Insurers can gain a deeper understanding of behavioral trends, customary aspects, and individual habits, using behavioral analytics, which can help in developing customized solutions and better real-time fast track customer services.

Presently, insurers have access to data in a point-in-time through self-disclosures or medical tests, which are often not adequate for risk assessment on an ongoing basis. Moreover, the process of risk assessment is made further challenging with the lack of electronic health records or any other common repository of health data. The product and the benefit offering can be directly linked to the performance and progress of the individual’s health score while the pricing could also be based on the health score consistency during the policy term, based on a pre-fixed health metric.

The traditional methods of purchasing a policy or raising a claim request are paper intensive and time consuming that can be effectively addressed by technology, making the customer experience smooth and hassle-free. Fraudulent claims can be detected using IoT and AI while triggers indicating fraud can be identified. Consequently, the liability of the insurer is significantly reduced and through lower premiums, the benefit can be passed onto the customers.

The past claims data of total loss/theft of vehicles can be acquired through a web integration that can identify fraud proposals, which come for underwriting; in terms of wrong non-claim bonus declaration or proposal for a vehicle that has previously been claimed for a total loss.

By relying on AI, the transparency of some decisions can be reduced while the extent to which an executive management can grasp how the business operates is restricted. Keeping in mind the fast changing technology, the standards of the devices and their usage should be considered and hence, only minimum standards should be laid down as part of the framework.

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