Archive for category: Insurance Trends

As the insurance industry continues to embrace insurtech, use of artificial intelligence will no longer be a novelty, but the norm. Insurers will have higher expectations for customized experiences and a higher degree of personalization.

Looking toward the next decade, insurers and brokers will have to consider how to use blockchain and artificial intelligence as a tool to transform the most important piece of all—user experience. They can do that in several ways:

Moving toward personalized insurance. Artificial intelligence makes it feasible for insurers to personalize coverages and rates. To do this they need AI and access to trustworthy, accurate data sources. Those sources, including sales databases, data from wearables and user preference data, offer companies much deeper insight and allow them to contextualize behaviors to make more rational decisions.

Studies show that nearly 80% of customers are happy to provide their insurers with additional data if it means they could benefit from a lower premium. Trials are being done on wearables data to help insurers accurately price individual travel, life and health insurance.

Enhancing customer experiences. The sheer volume of calls and transactions that insurers process daily is sparking movement toward AI. Chatbots and other AI-based insurtech applications are fielding more of these calls and communications. The industry is quickly moving toward customers self-managing claims. AI is providing more guidance to customers, and it has become increasingly difficult for them to differentiate between machine and human interaction.

As the industry evolves, big data and AI are combining to create new efficiencies that are transforming the customer experience. For insurance industry executives, a passing knowledge of AI isn’t enough.

It needs to be viewed as a cornerstone of company culture.

Investments to take insurers’ insurtech strategies to the next level are needed as part of their ongoing business strategy, or they’ll run the risk of lagging behind their more progressive competitors.

Data scrubbing and personalized sales. Insurers can’t serve customers well without correct individual information. It’s labor-intensive for humans to find and correct errors. With group plans, for instance, census data obtained during quoting is often incomplete. AI can analyze a census to make smart decisions regarding each insured’s missing and incorrect data. It also can boost sales by analyzing group attributes and providing customized options to maximize the attractiveness of the offer.

But AI can do more than just correct and input census data. A group insurance carrier may receive requests for proposals in many different formats, such as email text, Microsoft Word documents, and PDFs with text or embedded images. Recent advances in data extraction from unstructured digital sources include novel techniques, such as “deep biaffine attention for neural dependency parsing.” Dependency parsing is a technique for annotating sentences to make it easy for both humans and computers to understand, frequently used in algorithms for image captioning and language translation. Biaffine attention increases performance, resulting in a more reliable method for extracting quoting information from a PDF or an email. This new method improves straight-through processing and personalization in group and individual insurance. With the help of AI, the industry is finally moving from one-size-fits-all to a more personalized approach.

Check out the full article in AM Best’s Monthly Insurance Magazine. 

Wearables and fitness-tracking technology have witnessed rapid growth in recent times. International Data Corporation reports that one in every five people in the U.S owns a wearable fitness device. It also estimates that annual shipments will exceed 250 million devices by 2021.

Given the ability of technology to provide critical data, the wearables revolution continues to spark interest in the insurance industry. Data collected from wearable devices can provide critical health and fitness information. This information is vital to the development of interactive life insurance policies that track fitness and health data through wearable devices and smartphones. The technology hence holds the key between insurance firms and technology-savvy clients who value a modern, updated experience and digital engagement.

Industry giant John Hancock recently announced that it would begin selling interactive policies. They’ll require new life insurance policyholders to use activity trackers and share their fitness data. Insureds will, in turn, enjoy discounted premiums and other benefits.

Benefits and Opportunities

Wearable and fitness technology can be advantageous to both insurers and their customers. Wearables encourage insureds to become accountable for their health and fitness, and insurance companies stand to gain healthy clients with longer lifespans.

Most life insurance policyholders pay their premiums for an average period of 20 years. With the adoption and use of the trackers, they will be able to lead healthier and longer lives. Lower mortality means higher insurer profits.

Wearables also provide companies with a simplified way of collecting underwriting information. The data simplifies the risk-assessment process by offering metrics that would have taken longer to obtain through a full medical test. The data collected also acts as an additional source of information for new product development.

In addition to discounts on premiums, clients are also given the tools to boost their quality of life and well-being. Wearable devices can help detect conditions such as heart disease and high blood pressure and help insureds get treatment before things get worse. The technology can also be used to detect a client’s unhealthy lifestyle habits, such as smoking and excessive drinking. With lifestyle conditions becoming prevalent, wearable devices will go a long way in promoting a healthy lifestyle.

Risks and Challenges

The rapid growth of wearables and fitness devices comes with the risk of infringing on privacy. The insurer has access to very private information whenever the customer is wearing a device. The ever-present risk of the information leaking to other parties is also high.

Another challenge is the reliability of the data collected, as the devices may not always report accurate information to the insurer. For example, devices may be tailored to indicate the motion patterns like walking or running and may not be able to record other activities such as cycling. The elderly may also be victimized by errors, as their exercise regimes may be less demanding.

Finally, Wearables and Fitness Devices Are A Force to be Reckoned With

While there are various data safety and accuracy concerns with wearables, they can be overcome with proper protocol. Insurers have always dealt with sensitive information and will need to continue to handle such data with care. As for inaccurate heart-rate and other readings, studies show that fitness data is evened out over time. For example, a wearable device may not provide an accurate reading of the user’s heart rate during fast-paced or high-intensity exercises, but it can provide a comparable average over the period of the workout.

The use of wearables and fitness devices as data collection tools in the insurance technology sector is increasingly gaining popularity. Their role in shaping industry trends can no longer be understated. As software and reliability keep improving, insurance companies will further embrace wearables as the future.

 

The insurance industry used to be a tech laggard. No more. Though there’s still much work to be done, most insurers are now better positioned to capitalize on their investment in technology.

Here are eight key technology trends that continue to shape the industry.

1. Greater stress on cybersecurity

An Ernst & Young security survey revealed that 59% of respondents had encountered a significant cybersecurity incident in their organization. Because insurers store so much sensitive personal and business data, they’re a prime target.

Cybersecurity strategy should be focused on proactive measures rather than reactive strategies. Cyber-crooks are relentless and inventive. Security has to be a top priority for insurers of all types and sizes.

2. Filling a gap in employee benefits automation

While group proposals and policy administration are both well automated, between the two comes group onboarding, which has not been automated.

But solutions are being developed and implemented. Onboarding solutions will be built on automated data capture and importing. Data integrity is crucial. Employee information must be correct and complete when entered.

The solution must also offer robust data security and comply with privacy regulations to securely to gather and store employee information. Flexibility is also mandatory because integrating onboarding closely with both proposal and policy systems is essential to efficient workflow.

3. Cloud computing grows

Cloud computing will continue to be adopted widely by insurers and insurtech providers as it is cost-effective, speedy, and flexible. Cloud providers will continue to improve their technology to deliver sophisticated capabilities.

The security risks associated with housing data off-site via a third-party, however, can present challenges. While cloud storage companies are expected to protect data, ultimately insurance IT departments are responsible for their cybersecurity. That requires constant vigilance, hiring skilled people and spending enough money.

4. Internet of things and Big Data become more important

IoT continues to become more useful. Insurers can use real-time data to meet and enhance business objectives. This can boost efficiency and revenue and promote better customer service.

As the Big Data revolution continues to expand, IoT adoption in the insurance industry is expected to grow. It will enable collection of data in real time, resulting in lower premiums for insureds willing to participate. There will be ongoing adoption of connected devices for loss prevention and pricing in property-casualty, life and health insurance.

5. Analytics advance

Analytics can transform Big Data into actionable insights. As analytics and data science advance, insurers can better extract value from the huge amounts of data that now exist. Insurers can then leverage on the sophisticated information analytics to gain a competitive edge in the market.

For insurtech providers, there is a huge opportunity in the coming years to develop advanced analytical technologies that can make sense of unstructured data such as real-time video, social posts and live blogging.

6. Artificial intelligence: the future is here

In 2018, more insurance and insurtech companies found effective ways to integrate AI. In 2019, companies will complement a significant part of their structured data decision-making with AI data analysis and decision-making.

Robotic process automation will begin to gain a wider application facilitating automation of repetitive processes across the entire IT infrastructure. Robotics and AI can offer improved productivity, shortened cycle times and better compliance and accuracy.

7. Augmented reality blooms

Augmented reality is starting to have a presence in insurance. An article by software development company Jasoren identifies several AR use cases, such as using it to warn of risks, explain insurance plans, estimate damages and increase brand awareness. Alternate forms of AR such as virtual reality, mixed reality, and extended reality are shaping AR how it is being used.

8. Blockchain evolves 

The technology behind cryptocurrencies will be adopted for more promising applications. They include “smart” contracts, and secure decentralized data collection, processing and dissemination. While I do not expect to see a full-scale implementation of blockchain technology any time soon, many insurers, and insurtech companies are in the process of launching projects and initiatives to test its applicability and effectiveness for insurance, especially claims.

Life, group and voluntary benefits insurance is one of the most competitive verticals in the financial services industry. Strong relationships with customers are crucial to competitive advantage.

Engaging customers is a proven way of enhancing relationships. Unfortunately, the insurance industry has one of the lowest rates of customer engagement. Too often, the only contact with the customer is the bill.

How can insurers improve engagement? Use these five technologies to improve and enhance digital customer engagement.

Two-Way Communication Tools 

Email, social media, wearables and chatbots allow insurance companies to optimize every customer interaction. For instance, insurers can partner with wearables manufacturers so that these tools can be used as digital modes of communication between insurers and digitally savvy consumers.

Wearables, for instance, can monitor a customer’s health and give insurers a chance to reward good behavior of their customers – creating new opportunities for engagement. Platforms such as Facebook and Twitter can be used to engage consumers on various insurance issues and as a way of getting customers’ feedback.

Big Data and Data Services      

Insurance companies can use big data to find opportunities to add value to customers’ lives. The human touch is still important, but a computer is much better at searching through huge amounts of data in-real time.

Incorporating data-based services to provide the company with constant data streams from connected devices such as IoT and wearables is crucial. This data can be turned into insights that help improve customers’ daily lives, thus boosting customer engagement.

Artificial Intelligence     

Worldwide data production runs around 44 trillion gigabytes a year. One gigabyte alone is equal to about a 30-foot-shelf of books and insurers (along with the rest of us) are suffering from data overload. Often, customers have to wait on the phone while insurance employees sort through data.

AI can help solve this. It can assist insurance companies in cleansing large volumes of data and offer accurate predictions of customers’ expectations. It can provide customers with realistic ideas of what the future will hold, therefore helping them make better decisions for themselves and their families. In addition to dealing with all the data, AI can handle customer service with chatbots as well. Automating and increasing customer engagement in entirely new ways.

Analytics

AI helps insurance companies comb through large amount of data so as to predict exactly what customers want. But this is not the end of the story. Insurance companies need to find actionable insights from the information provided by AI.

This is where analytics tools come into play. Robust analytics programs (based in data science) can be used to study customers’ past data, research potential trends and evaluate the effects certain decisions might have on consumers.   Many are looking at predictive analytics related to claims patterns, benefit design and profitability.

Analytical tools such as Google analytics and Woopra (a real-time customer analytics service) can help insurers gain more knowledge about customers, which can then be used to inform strategies for customer engagement. Analytical tools can help insurers to create an all-inclusive roadmap that will help them improve and manage their customers’ entire lifecycles.

Web-based Self-service 

More and more insurance consumers expect to be able to monitor the status of their claims and manage their policies themselves online. Studies show that 38% of insurance consumers prefer web-based self-services and strongly feel that these platforms have shifted from “nice-to-have” to “must-have” options.

Web-based self-service improves engagement with customers. They give customers the freedom of choosing their preferred ways of making basic changes to their accounts, finding answers, refining service flexibility and improving customer experience.

The future is now

Customer engagement is becoming an increasingly important part of insurance. Enhancing rich, digital customer experiences through strategic engagement offers great opportunities, especially for insurers that are looking to cross-sell and up-sell their existing clients. Insurance customers are more and more willing to shift their loyalty to insurance providers that guarantee customers communication through digital channels and devices of their choosing.

They are looking for insurers that are able to interact and offer informed conversation that relates to their individual needs, desires and relationships. It is therefore important that insurers cultivate proper digital ways to engage their customers. Without these customer-focused technological trends, any insurance company risks losing a big chunk of market share.