Insurtech has made vast improvements in fraud detection via AI algorithms. IoT devices and drones have made it possible for insurance companies to collect vast amounts of detailed, sophisticated data in ways that simply weren’t possible before. Technologies like blockchain have made customer data safer and more secure than ever before.
Insurtech (short for “insurance technology”) is a broad and evolving category of modern technologies that are rapidly changing the insurance industry. Insurtech has become a shorthand for any technology being used by insurance companies to help it run more securely, quickly, and effectively.
There’s not only one specific “type” of insurtech. Rather, it’s a wide array of different technologies that streamline processes, improve customer experience, increase efficiency, and generally make life easier for both insurance companies and their customers.
Common examples of insurtech include (but are not limited to):
- Automation of common processes by software to reduce the burden on human personnel, as well as automation of some customer service functions (such as AI chatbots instead of human service agents).
- Artificial intelligence and machine learning to take advantage of big data and perform advanced analysis of customer information
- Blockchain technology to provide better security, privacy, and transparency for important insurance data
- Internet of Things (IoT) to broaden the possibilities of collecting valuable customer data
- Smartphone apps to provide unprecedented convenience for customers
- Drones that will revolutionize the way insurance claims are documented and inspected
How insurtech benefits consumers
Obviously, the adoption of evergreen technologies that will scale and evolve with changing customer demands stands to create huge benefits for insurance companies, including saving money and staying ahead of competitors — but what about the consumers themselves? What do they stand to gain from the adoption of insurtech? Here are a few ways insurance technology can provide big benefits to consumers, too.
More efficient processes
A more efficient operation doesn’t just look better for the insurance company’s bottom line. It also offers some secondary benefits to consumers. For example, improved risk and modeling through machine learning and automated data analysis mean less paperwork for everyone involved, and the collection of customer data through technology like driving trackers means insurance companies can offer consumers better car insurance rates for having a clean and safe driving record.
The internet and smartphone apps have already revolutionized the way we live our lives in a myriad of ways, and this includes the insurance industry. With the development of insurance apps for smartphones, consumers can now do things like file claims online, view their medical patient records, get product quotes, manage their accounts, pay their bills, and get answers from their insurers — all without having to visit an office or even make a phone call.
Improved customer experience
Faster, quicker, more efficient service is one of the major ways in which insurtech makes life better for consumers. This has been especially true in the midst of the COVID-19 pandemic, which has made in-person meetings with customers risky or even impossible.
One of the main advantages of insurtech for customers: speed. The ability to file claims, get help, ask questions, and perform other common tasks without having to wait on hold or go into an office are major benefits for busy people with a lot to do. In today’s world, many customers have neither the time nor inclination to go out, research and compare products on the phone, visit an office, and then make a purchase. The ability to do all this from the convenience of one’s phone or home computer is a major step forward for businesses across the board — not just insurers.
The use of big data to personalize and customize the user experience is another major benefit of insurtech. Thanks to machine learning and AI, insurers can now analyze the risks and needs of an individual customer in ways that would be cost-prohibitive for a human to perform.
IoT devices and drones have made it possible for insurance companies to collect vast amounts of detailed, sophisticated data in ways that simply weren’t possible before. Gone are the days of mailed-in pictures and massive amounts of paperwork for insurers to perform accurate pricing and underwriting. Now things like driving records, health records, and other IoT data have dramatically changed how underwriting works — which has meant lower costs for those underwriting tasks, which also means fewer costs passed on to the consumer.
Better security and fraud detection
Technologies like blockchain have made customer data safer and more secure than ever before. Blockchain information is virtually incorruptible and impossible to fake, offering unprecedented security and customer trust.
Insurtech has also made vast improvements in fraud detection via AI algorithms. Fraud accounts for almost ten percent of insurance company losses yearly, which means insurers have invested vast sums of money into preventing it. Insurtech has helped address fraud by creating decentralized repositories for customer data, meaning there’s an accurate record of claims and transactions across different insurance companies. Also, data analytics, advanced algorithms, and blockchain tech can detect and weed out common methods of insurance fraud much more quickly than humans, which means less time and effort spent dealing with fraudulent claims — which in turn can mean lower premiums for consumers.
Inmediate is an insurtech startup from Singapore that is using the latest technology such as Artificial intelligence, Distributed Ledger, and NLP, making insurance processing and underwriting fast, cheap, and flexible. That gives for better processes, lower costs, improved time to market, and new revenue opportunities.