The Insurance industry is some of the oldest businesses in the world, and when you visit a corporate headquarter, it’s quite visible. It has seen how technology has been sweeping across each country, changing the way businesses create value - but in a lot of cases insurers have merely changed themselves.. Technological transformation has long been living in the main headings of insurance articles but now it’s time to act on it.
It would be beneficial for the industry and customers to take advantage of artificial intelligence, big data, predictive analytics, and other key innovations that define the future of insurance. They are bringing in unfamiliar words into the vocabulary of incumbents, altering the world on which they have long been competing.
The good news is, some incumbents have responded to the challenge and are now near the other end of the bridge they built to link the gap between legacy systems and digital transformation. Insurance is destined for disruption. Only those who don’t want to grow fail to see that.
Here some of the trends that shape the industry.
The rise of InsurTech
A portmanteau of the words “insurance” and “technology” was formed for a reason. For most industries, it is the customers’ demand that prompts evolution. The same goes to InsurTech, which is the result of rethinking the industry and driving solutions using modern approaches.
Now that the world has been forced to adapt to far-reaching changes, the insurance industry’s need for technology isn’t even a topic to talk about. It is a key feature to maintain relationships, grow customer base, access new markets, and improve business processes.
InsurTech has no way to go but up. The unprecedented level of InsurTech funding ended in 2020 is crystal-clear proof of that. Despite the challenges faced by businesses around the world, last year had the most number of Insurtech investment deals, with an all-time high of US$7.1 billion, 377 deals in total.
What sets apart the InsurTech firms is the groundbreaking technology trends that they boldly jump into to fulfill the insurance’s disruption. Artificial intelligence, machine learning, big data, and state-of-the-art cybersecurity are just some to name a few.
Big data will be the blood of insurance. It runs through every vein to make sure that essential elements are transported and every process is successfully done. For a highly data-driven industry like insurance, the most innovative action to do is to turn data into valuable findings and insights.
Big data give opportunities for a more customer-centric approach. It provides a deeper understanding of the customer’s preferences, challenges, and other personal information which then can be used for a more personalized member experience and even sales conversion for the insurer by upselling or cross-selling.
From underwriting, fraud detection to the claims process, big data can also help companies streamline their activities. Forecasting risk is now also one step ahead through predictive analytics. It aids businesses in responding to variables and determining the probability of success or failure.
There are numerous opportunities associated with data analysis and to what extent businesses can benefit depends on how it will be leveraged. Starting internally and aiming for measurable outcomes is the ideal way to kick-start the big data analytics program. Small or grand actions, what’s important is to put unstructured data into work.
Artificial Intelligence and Machine Learning
With the increasing volume and speed of data today, the demand for data management tools such as Artificial Intelligence System heightened. Enabling computer systems to accomplish tasks that would typically require a human’s intelligent behavior, AI adds value to the insurance market in terms of understanding and managing risks. Algorithms based on Machine Learning, a subfield of AI, are programmed to handle unstructured data where classical algorithms fail to extract needed information and insights. These ML-based Natural Language Processing (NLP) technologies such as chatbots and other similar gadgets are advantageous in the insurance industry especially in improving customer service, among others.
Digital Social Selling
AI and Machine Learning have been pivotal in transforming customer-facing services for digital marketers through increasing efficiency and optimizing client experience.
The emergence of chatbots, a product of AI and Machine Learning, is a digital service capable of answering frequently asked questions, giving basic advice, checking billing information, and addressing common inquiries and transactions empowered by the digital selling capacity of the insurance industry.
- It gave way to a more effective social selling, building a more meaningful relationship of various social networks.
- It allowed 24/7 conversations with clients, accurate identification of triggers to engage, and consistent sharing of useful content to help clients to make informed decision-making.
- It effectively expanded the client base, taking over digital platforms and social media sites. Digital social selling is able to increase brand awareness and drive sales up.
With these technological innovations, the silver generation, the older but still active part of the population, is a pretty exciting customer segment. Harnessing decades of real-world experience along with their sizable earning power, and the influence they have over the younger generation, digital marketers and advertisers must consider the seniors a desirable target demographic. As such, developments in the insurance market should be senior-friendly.
The silver generation must be taken into account when developing AI systems and other technological innovations. Silver consumers are now tech- and social media-savvy and insurance companies must take advantage of that.
What is the overall impact of disruptive tech trends in improving customer experience?
Parts of the insurance industry have gone a long way since the introduction of InsurTech. Insurance should now be where its customer is, influencing their day-to-day lives through products with technologies that truly matter. We are not there yet. But some insurers now are not afraid to take the lead and do something no one has ever done before. We did the same thing a few years back and didn’t regret anything.
With all the InsurTech trends sprouting like mushrooms, multitudes of opportunities are available to meet customers’ expectations no matter what generation they are from. What will make this era of disruptive tech trends one for the books is to make the most of the resources available and not stop innovating for the better good.
Let’s do it.
Founder and CEO of Digitalscouting, renowned speaker, author, and top-ranked insurance and finance influencer. Also known as the “Rebel of the Industry” and an attention hacker, Robin lives in the stages of conferences and events, sharing unreserved opinions about insurance, finance, and other timely topics. Nothing can stop Robin from driving companies to climb up the ladder of digital transformation. Aside from providing consultancy services through Digitalscouting. He also started a weekly live show featuring the biggest names in the industry spilling innovative ways, tech trends, latest data, secret sauces, and many other key tools in achieving success.