Tech has joined the insurance game bringing with it the full force of innovation and disruption we have seen in other sectors transformed by technology.
“InsurTech” are technology-centric companies that harness cutting edge technology to offer a whole new slew of services. Though some insurance companies view this as a threat, a significant portion recognizes it as a valuable opportunity.
InsurTech is here, and it’s here to stay, and the companies that will come out on top are those that can embrace the change. In order to stay ahead of the coming disruption, insurance companies will have to incorporate this new technology and make it a central part of their day-to-day operations.
However, there are some fundamental differences between InsurTech and traditional insurance that one cannot ignore. One such difference is the advantage InsurTech has in its freedom from legacy products, processes and IT systems. Since InsurTech is designed from the ground up, they can harness the latest technology which translates into less investment and quicker returns.
Here are several ways in which InsurTech are harnessing their digital expertise to maximize value:
Using artificial intelligence (AI) and chatbots, InsurTech companie can provide robo-advice through a digital customer interface. Chatbots are a central component of InsurTech as they help improve the customer experience and even have the potential of replacing insurance agents. Through chatbots, InsurTech firms can establish trust and understanding by ensuring that the low and high premium policies remain viable to suit their customer base. However, it is important that InsurTech firms gauge their base before adopting chatbots. By understanding their customers, insurers can find chatbots that suit the specific needs of their clients based on personalizing factors such as culture, age of target market, smartphone penetration rates and level of education.
InsurTech companies are able to offer personalized, small-ticket products based on usage or value-added services. This is a key area in which machine learning and artificial intelligence have the opportunity to greatly disrupt the industry. Insurance companies have access to a lot of customer data and, with companies like Duck Creek Technologies and their specialty partners like, Penguin.Tech, can provide custom offers based on the analysis of such data. Property and casualty (P&C) insurance software coupled with advanced analytics and machine learning can help in this personalization. This advanced P&C insurance software will reduce the total insurance cost of customers and endear them to the company. Offerings like Penguin.Tech’s API Kayak with a robust microservices API and the ACORD-based messaging can also help to enhance property and casualty insurance products and offerings.
With access to diverse streams of data – from telematics to smartphone apps – InsurTech companies can apply machine-learning and AI to create a whole new experience. Since there are very few sources of applicable data, AI analytics are playing a key role in ensuring that the data can be harnessed creatively to develop insurance products and services. With AI insurers can improve everything from customer acquisition to risk models to marketing and distribution channels. More than that, AI is central in enhancing the quality of the products and services offered through learning from customer insights.
These technologies are undoubtedly the new frontier of the insurance industry and through harnessing them, insurers are able to offer a whole new world to their customers. A world that meets their demands, improves their experience and protects them.
Latest insights also show an increase in the partnership alliances with smaller, more nimble and agile InsurTech firms, like Penguin.Tech, to help compress the timelines for operational change.