Top 5 Trends Helping Insurers Embrace Digital-First Business Model

By Insurance CIO Outlook | Monday, August 12, 2019

 Trends  InsurersThe global insurance market is experiencing a shift to ‘digital-first’ business model that can unlock new value, revenue streams, higher profitability, and reduced operational costs.

FREMONT, CA: The insurance industry’s technology revolution is well underway, and insurtech is making a meaningful impact on insurance operations with plenty of potentials left to explore. Insurers are investing heavily in technology and working to develop new solutions and platforms internally. Until a point, applications of new technologies was limited primarily to claims management and customer service. Easy to use portals and secure processing of claims solved pain points for both clients and carriers. But the more significant change is on the horizon. Big data, artificial intelligence, and machine learning are driving a shift in the way insurers to develop their business model. Below are emerging insurance industry trends expected to help insurers stay on top of the competition and satisfy their customers’ needs.

· Machine Learning and Automation

In the fast-changing and competitive landscape, insurance companies are focusing on marketing, distributing, and issuing policies more efficiently. Insurers also need to offer high-quality multi-channel customer service at optimized cost. Insurers are exploring and capitalizing on machine learning and automation during the whole product and services lifecycle, including marketing, underwriting, customer service, claims processing, fraud management, and reimbursement. Thanks to the capabilities of intelligent systems, because the insurance industry is beginning to explore the automation perspectives of much more complex processes.

· Cybersecurity

Another emerging trend in the insurance industry is cybersecurity. Security is an issue that insurers must look at from the perspectives of both the security provider and the client. Insurers haven’t been the targets of hackers that much previously, and however, as other destinations become more secure and inaccessible, cyber attackers are moving on to more unprepared targets. Since insurance companies hold enormous amounts of sensitive information. The other way cybersecurity could influence the insurance industry is through its inclusion in various policies.

· High Personalization

Higher personalization in premiums is an emerging trend that is scheduled to stay long in the insurance industry. Because of all the products and services customers are exposed to, they expect a certain level of customization. To be able to supply their customers with the personalization they want, insurers would need a foundation of robust data insights and behavioral insights to develop a more in-depth view of their customers.

· Blockchain

The blockchain an important technology trend that will revolutionize the insurance industry in the next couple of years. Insurers have already started employing blockchain in their existing workflow to avoid huge losses because of false claims and scams that happen daily in the industry. Another aspect of the insurance industry that can be positively affected by blockchain technology is the processing of claims. Considering the number of data points that need to be verified, and the manual effort required, the users find the process too long and tedious. By using blockchain, all these necessary information for claims verification can quickly be processed. Besides, insurers can track the usage of an asset by using the data available in the blockchain without tampering any information.

· Evolution of Automobiles

Some emerging insurance industry trends are driving significant changes in automobile insurance. Ridesharing, semi-autonomous cars are transforming the whole landscape for the insurance industry, premiums, and in some cases, the size of the market. Car manufacturers are increasingly incorporating self-driving systems in their vehicles. In case of an accident that has no human involvement, the fault seems to fall onto the manufacturer. The complete process of standardizing insurance for autonomous cars is undoubtedly going to take time. Vehicles would need a way of detecting whether the fault lies with the driver or with the systems itself.

Like all the other industries of the finance sector, the insurance industry is ever-changing, and because of the plethora of competitors who offer similar services, one needs to embrace emerging trends to stay ahead.

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