Advanced technology is increasingly being adopted by insurers to help both the institutions and their customers by increasing efficiency and allowing more tailored policies.
A report by Business Insider Intelligence has looked at these trends. The report notes that distribution was the area of the insurance value chain that was first disrupted. This area continues to evolve and the newer technology-based players, known as “insurtechs”, are developing increasingly sophisticated platforms and targeting highly niche demographics.
The report gives the example of insurtech player Bought By Many which used data to launch a travel insurance policy for cancer sufferers.
The fundamentals of insurance — policy creation, underwriting, and claims management — are also now starting to experience disruption. Insurtechs are using new business models that are enabled by technologies such as data analytics, connected devices, and machine learning to build holistic policies for consumers.
Reducing fraudulent claims without damaging the customer experience is one of the biggest areas of interest for incumbent insurers. As a result, many are looking to combine improved fraud detection with digitised claims processes. This would reduce fraud-related outlays, while making risk models more efficient. That, in turn, will help them more accurately price policies.
An improved claim journey will also boost customer satisfaction and loyalty. Fifty six percent of consumers surveyed by Business Insider Intelligence want the ability to submit claims digitally.
Australian insurer Suncorp has moved into this area and has rolled out a company-wide digital claims process powered by IBM’s AI platform Watson.
Developments in location technology and artificial intelligence will bring efficiencies to many areas of the economy including insurance. It will allow more personalised products to be designed and help companies to price more efficiently.
For more on Artificial Intelligence and the Internet of Things see our BI Research Connected World report.
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