To familiarize yourselves with the “InsurTech” term it is important to connect the term to technological innovation. Contrary to some people’s conclusions about the insurance industry, innovation is implemented to insurance industry sector as well. Innovation in insurance industry ensures better creation, distribution and administration of the insurance business.
InsurTech is especially important for conglomerates, because it gives them a perspective and options outside of traditional human resources. On the other hand, InsurTech provides other insurance companies access do data and analytics from IoT devices. New data from IoT devices creates a more dynamic pricing system which is based on new market situation.
Nowadays, customers get their insurance information via their smartphones. There are various phone apps and auto-monitoring devices that ensure that customers get access to insurance information in the matters of minutes. Even while travelling, customers will require insurance, so instead of going through multiple policy documents, they can access various policy options easily on their mobile phones.
The main purpose of InsurTech is to help insurance companies become faster and more efficient in processing claims and managing their assets. They depend mostly on AI, big data and IoT devices.
Types of InsurTech:
There are two ways to implement InsurTech into your services: first are technology-based components and secondly, solutions-based components.
Next, we will list the current technologies in InsurTech industry:
Artificial Intelligence (AI) For example, AI empowered chat function. Insurance company services can greatly benefit from AI chat function. The function primarily fastens responses from communication counterparts.
Machine Learning: Insurance companies largely depend on collected data. Information gathered from different sources can be and is very valuable for potential customers. The machine is learning for risk modeled data because it is used to predict future losses. There is also demand modeling available, which is used to estimate premium amounts and predict future demand.
Internet of Things (IoT):
There is a connection between IoTs and the Internet. The data collected is used for risk analysis. For example, all Ubers have a GPS system that tracks car’s speed, location and breaking pattern. This data helps with safety prediction and risk analysis. Additionally, Apple watches have a similar concept. Your watch tracks your health measurements and this is also a risk analysis because the watch can track your heartbeat and so on.
One of the main reasons of block chain technology is improvement of data security standards. The technology also helps with building trust between insurers and insured customers. Another benefit is bringing down transaction costs. Also, it lessens human resources and increases data collection.
With guidance of advanced analytics, insurance companies get a deeper insight into customer’s wants and needs. Advanced analytics allow customized marketing for each client. In turn, this gives competitive advantage compared to other insurance companies.
New solutions of InsurTech:
Those solutions are designed to help brokers and agents to find a suitable policy for each client. This is beneficial for agents because it improves their efficiency rate and makes transactions faster and easier.
New payment options:
Payment is an essential segment of every insurance company and the goal is the payment process automatisation.Digitalization makes the payment process swifter.
Usage of InsurTech:
The Know-Your-Customer (KYC):
KYC is an identification process of each customer that must be done by insurance companies and brokers. Insurers must collect all the data to be able to verify all the customers. In addition, insurer’s job runs more smoothly.
Smart Contract Formulation:
Smart contract formulation allows automatization of protocol authentication. For example, for life insurance policy pay-out, the system will automatically search for death registers online, assess the validity and initiate the pay-out process. This is beneficial because it leaves out the grieving family out of the initiation of the process. Companies can use smart contract formulation system for contract registration and authentication process. This also decreases the ability for fraud and increases customer satisfaction. Decentralized digital depositary allows detection and elimination of fraud.
Benefits of InsurTech:
There are many benefits for insurers and customers. First, we will mention consumer benefits. For consumers, the most essential advantage of InsurTech is convenience and accessibility. The ability to do all the work through mobile phones is a must. It is important for InsurTech to be mobile-friendly. Consumers can make all the decisions from the comfort of their home. Also, the increased security and ability of customization for each consumer. InsurTech allows spam free online transactions. The sole purpose of data collection is to upgrade and customize services for their customers.
On the other hand, there are many benefits for insurers too. First, this technology saves a lot of time and resources for insurance companies. It decreases fraud, especially in customer identity and money laundering incidents. Next, it simplifies underwriting because of automatisation and data collection. Insurers can also promote new products easier with smart contracts.
Final Thoughts about InsurTech:
To sum up, there are multiple benefits for both consumers and insurance companies to implement InsurTech into their daily lives and usage. Most importantly it makes everything faster and easier. Who does not like to hear these words and have a more pleasant experience?