Marketing TeamMay 14 2018 in Blogs
Technological Disruption: Opportunity or Risk?
According to PwC’s CEO Survey, insurance company CEOs are dealing with unprecedented challenges. The trifecta of technological advancement, customer expectation and changes in regulations is threatening growth prospects of some of the largest players in the sector. Add to that new market players that are riding the technological wave to create innovative solutions and it is little wonder boardrooms across insurance companies have more than their fair share of furrowed brows.
However, technology itself can either be an opportunity or a threat. Leveraging the right kind of technical expertise can result in creating new business opportunities, reducing costs as well as increasing profits from existing lines of business. New technologies like Internet of Things (IoT) and Artificial Intelligence are at the forefront of much of the change witnessed in the insurance sector. Here are the top three ways technology is disrupting insurance to the benefit of consumers and insurance companies
Underwriting and Claims Settlement are Quicker
Advances in data analytics has helped insurance companies analyze applicant information and compare it with thousands of similar cases thereby speeding up the underwriting process. With public and government institutions moving records online, companies are able to tap into online databases to verify information for medical, employment and real estate and car ownership records to reduce cases of fraudulent activity by claimants. Companies are also learning to harness big data analytics to make underwriting and claims assessments.
Telemetrics rewards insurance companies and customers
Telmetrics is, simply put, part of the Internet of Things, where sensors record and send information on all aspects. This includes everything from public lighting systems to the wear and tear of tires. The huge amount of data being generated is a boon for insurance companies that can create policies that reward say driver behavior. Current car insurance policies reward drivers with a simple no claims bonus. But on board sensors aided by smart algorithms can distinguish a careful driver from one who lives on the edge of speed. Policies can reflect the individual driving habits, thereby benefiting the driver as well as the company. The same goes for health insurance. The fitter individual gets the better policy.
Better at Identifying Fraud
A LexisNexis survey points out that 35% of all claimants consider it acceptable to falsify data on insurance applications. As fraud increases and insurance companies need to make more payment, everyone is affected when insurance premiums rise. However now claim adjustors have access to sophisticated algorithms that help highlight foul play. Analytics help identify suspicious activity and patterns, after searching through vast quantities of data submitted by the client and previous cases which have similar characteristics.
There is little doubt that insurance is on the cusp of major change driven primarily by technological advances. It is no longer a question of whether you should adapt, rather how quickly can you incorporate technology to create a nimbler, faster, more customer focused entity. If you are not doing it, someone else is!