InsurTech has evolved to be a subset of FinTech that utilizes the latest available technologies to address challenges and opportunities in the insurance industry. The demand for InsurTech services has skyrocketed with the surge in COVID-19 cases and industry leaders are trying to balance their effort and focus on managing their current business and operations, while also prioritizing avenues for future investment in the post-pandemic world. Though the InsurTech industry is predicted to grow by USD 15 Billion during the years 2019-2023, organizations are evaluating the possible implications of the pandemic on their businesses, along with unexpected avenues of growth as well.
Here are some of the new avenues InsurTech players need to focus on going forward, to ensure they stay on top of their game in an ever-evolving playing field.
McKinsey reports a total potential annual value of up to $1.1 Trillion for AI adoption across industries. Though industry experts have been urging insurance players to embrace digital transformation to offer better, faster, and cheaper services for quite some time, organizations were moving at a snail’s pace. Artificial Intelligence can transform the insurance industry by replacing frustrating, time-consuming, bureaucracy-dependent systems with fast and tailor-made solutions. Organizations can leverage AI to customize their offerings such that customers can avail them whenever or wherever they want. Personalized pricing is another area where AI can be utilized. This will allow customers to pay only for the package they wish to avail rather than opting a comprehensive package. AI will revolutionize the way companies operate in a post-COVID-19 world.
A data-driven predictive analytics system predicts the behavior of the insured, delivers better insights, and enables the insurance providers to make better decisions. Predictive analytic systems can be leveraged to personalize and optimize offerings. For instance, by analyzing historical consumer behavior, customer preference, risk exposure, etc., Predictive analytics can also be utilized to anticipate and prevent fraudulence, predict customer churn and application manipulation, and ensure superior customer engagement. In a nutshell, predictive analytics will be the ‘insurance package’ that insurance providers must opt to continue offering their services in a highly competitive market.
Market research firms are expecting the IoT insurance market to be worth around US$ 192 Billion by 2025 at a CAGR of 65.5%. Real-time collection and analysis of data from IoT devices or wearables enable the insurers to improve efficiency, reduce costs, and optimize resources. With proper data analysis and meaningful insights, insurers would be able to offer customized solutions for each customer and establish strong and ongoing personal relationships. They must monetize the data generated to develop new services and business models with an objective to create additional revenue. The success of insurers depends significantly on their preparedness to embrace technology advancements and innovations to create value for their customers in the long term.
Like in any other industry, customers in insurance would love to compare different packages without having to speak to an agent and make the purchase of their customized insurance services online. Chatbots offer superior customer assistance instantaneously rather than having a customer wait to talk to a customer service representative, ensuring faster and more efficient services. Insurers must utilize chatbots to offer a higher level of personalization while crafting policies for customers. Along with guaranteeing prompt customer responses, chatbots must be used for recommending new policy suggestions based on customer behavioral traits. If designed and implemented correctly, chatbots can enhance the relationship between customers and providers.
With connected devices going to rule in the future, Telemetry provides a great opportunity for insurers to maximize their value propositions. Telematics can change insurance equations and disrupt the business as well as operations models – from risk assessment to customized and competitive pricing, improved fraud detection, reduced claims resulting in superior customer experience, and increased customer retention. They must position the societal and environmental benefits of having telematics in place in collaboration with the government and other regulatory bodies.
The world is going through a very challenging and uncertain time. The pandemic has caused the global economy to contract sharply in the near to medium term. With a global recession looming on the horizon, it is natural to adopt a cost optimization strategy. But we believe that time is ripe for InsurTech companies to invest in innovation and digital transformation initiatives. InsurTech companies need to adapt to new technologies and technology-led business model innovations to remain competitive.
Experion Technologies has a long history of working with InsurTech companies to build solutions that enable insurers to craft better customer experiences, navigate regulations faster, reduce manual processes, and introduce innovative business models. To know more about our InsurTech offerings please contact firstname.lastname@example.org.