In every aspect of our lives, technology is increasingly affecting our financial lives. And while financial technology or fintech came early to banking and we could bank online, followed by mobile banking, technology is playing a role in other areas of personal finance as well as insurance is no exception. We will now look at the four ways in which technology is transforming insurance. This forms a part of what we know as insurtech or insurance technology.
1. Social media: Social media has been around for a while and insurers are finding uses of it in more practical ways. Information about a person’s lifestyle or that of a section of people can be accessed through social media. Social media is also an excellent platform for customer education and customer engagement. It also provides a platform where customer queries and grievances can be addressed in real-time. Such initiatives help manage the reputation of the brand.
2. Artificial intelligence: The buzzword in technology has found its way into insurance too. Some of the earliest use of AI is the use of chatbots. These chatbots are essentially computer-based programs who answer customer queries on chat platforms 24X7. This helps insurers to save on costs and also generate new business leads. AI is finding other uses in insurance too. A few examples are the use of Artificial Intelligence in underwriting as well as claim processing, wherein the technology assists in faster claims processing and underwriting a proposal based on a pre-fed checklist. This not only reduced human intervention but also cut down on time.
3. Wearable tech: Wearable technology is a smart way insurers are looking to reduce the premiums they charge on their policies. Insurers can get real-time health data of their policyholders from gadgets such as fitness bands. Using this data they can track their physical activities. This helps them to provide personalized insurance products. If a policyholder achieves certain defined health goals that keep them fit, he can get the benefit of reduced premiums.
4. Blockchain: When we hear about blockchain, we think of Bitcoins but the concept has far-reaching uses in different areas including insurance. The technology has the potential to offer several advantages to the insurance industry. It can help hospitals and doctors to access patient data quickly, safely and comprehensively, thus avoiding the need for extra medical tests and time wasted in diagnosis. Patients will have the right to their data and can provide it when required without the help of any external agency. Data shared on a distributed ledger and can be accessed anytime by different health insurance providers even as the loss of data and documentation would almost be reduced to nil. This would help bring down costs for the insurance companies.