Technology — perhaps more than anything else — changes our world. The industrial revolution in the late 19th century allowed our contemporary forms of life, art, and businesses to flourish. Just in the past 21 years, leaps forward in the world of technology have caused the revolution of many industries.
But while many people focus on the innovations made in telecommunications, gaming, and transportation, many people forget that insurance innovations are just as impressive. The insurance industry has benefited from the same technological breakthroughs that have revolutionized other industries and made some amazing use of them.
This article will walk you through some insurance trends, let you know some recent insurance innovations, and highlight some problems with the industry that can most definitely be improved upon improved for the future.
What Are Some Ways to Innovate the Insurance Industry?
It's easy to understand how technology influences our world. But let's take a look at a few ways it affects insurance.
1. Workflow Automation with Machine Learning
One of the most prominent innovations of the 21st century has been AI or Artificial Intelligence. AI is the simulation of human intelligence by machines.
Previously, machines had to be programmed in order to complete specific tasks. Now, with AI, machines can learn and grow themselves.
This is at the core of the subset of AI known as Machine Learning. It makes use of data and algorithms to increase a machine's efficiency at tasks that humans consider less desirable.
Machine learning has allowed skilled workers to focus more on the skilled tasks, while the grunt work gets tasked out to machines.
With some of the best machine learning programs out there, it's very easy to scan and proofread documents. Machines are also very good at logging contacts and constantly updating contact file books. They can sort your documents so that everything is easy to find.
Younger workers often fear that AI is coming to take their jobs. However, it's far more likely that AI will be used to take care of certain less desirable parts of jobs, and labour will be moved to other, more useful tasks. This sort of panic almost always happens when a new technology comes along.
2. Claims Processing with Machine Learning
To get more specific about the insurance industry claims processing becomes incredibly easy with machine learning.
People outside of the business might not know it, but one of the banalest parts of the job for people in the insurance industry is sorting through claims.
Before the interesting business even gets started, an insurance agent has to read through claims and figure out if they were filled out correctly, if they're applicable, and if they need to be put under further scrutiny. Machine learning makes this incredibly simple, learning to recognize certain aspects of claims and their validity.
This is a great example of machine learning making work easier without impacting anyone's job negatively. No one gets hurt in this exchange. Insurance agents have their jobs made that much easier, and clients' wait times for responses is dramatically reduced.
Claims that are easy to pay out and happen often, like a smashed windshield, are easy to automate. Now, the technology is developing so that more complicated tasks are becoming automated as well.
3. Telematics and Risk Management Improvements
It's in the interest of the insurance industry to make sure that people stay healthy. The less that people get injured, the less money than they have to payout.
This is why the insurance industry is so good for the world — protecting their bottom line doesn't mean putting people in danger. In fact, it hurts their bottom line when people get hurt.
Telematics refers to the combination of communications and computerized information. It's grown drastically in the past for years, no doubt due to the fact that we relied on telematics largely during the COVID-19 pandemic. Crisis breeds change, and even now that we're stepping out of the COVID lockdown, telematics is here to stay.
Telematics has been used to figure out exactly what goes wrong in certain workplaces. This information can be gathered and presented to employees and employers alike in order to decrease the chance of injuries happening again. From here, work safety precautions and videos are created.
This helps all involved: insurance companies don't need to pay as much energy, workers get injured less, and employers have to find fewer replacement employees.
4. Improved Conversational Chatbot Interfaces
Chatbots are a fantastic way to attract business. When someone lands on your website, they can find it a bit disorienting. This is why many businesses have invested in chatbots, which automatically message people and take them to the services that they need.
Chatbots are fantastic at providing value. The number one most common usage of chatbots is to give a quick answer to a query. When insurance companies provide this option for people, they're more likely to come back and patronize them more.
However, up until recently, chatbots had limited features. Advances in technology have made it easier than ever to solve the problems that people actually have. Now, chatbots generate a 35-40 percent response rate, proving that people genuinely trust them.
This is yet another example of benevolent AI. It's impossible to employ a worker to sit on a website (of course depending on the volume of inquiries and size of the company) and message people as soon as they log on. Chatbots fill this void.
5. Insurance APIs
APIs (Application Programming Interface) are a type of software that works as a messenger between two applications. APIs take the complex digital information that's out there on the internet and present it to you in an easy-to-understand way. Examples of some of the most simple APIs are Firefox, Safari, Internet Explorer, and Google Chrome.
Insurance APIs allow the various software and applications that insurance providers have to use to flow smoothly together. They permit the easy passage of information and an improvement of customer experience
APIs in the insurance industry are starting to get released to the public. These allow the average customer to have a quick and easy experience. If you've made use of an insurance companies app, you've used an insurance API.
APIs make it incredibly easy for insurance companies to deliver new services to customers. Any customer with access to the API will most likely receive a notification that the new service is being offered, and could likely take advantage of it right away.
If you've been following along here, you're probably noticing a trend. The most important technologies in the insurance industry are those that help people communicate with each other.
6. Insurance Fraud Detection Software
Insurance fraud is one of the biggest threats to the insurance industry. It impacts the insurance industry because they're losing money on claims that aren't real. It impacts the customers because it means there's less money to go around for them.
But that's not all. Insurance fraud spoils the ease of the industry for everyone. Honest people just looking to get their claims filed out might be subjected to examinations, simply because of other bad actors.
Insurance fraud can be tough to detect. You're often gambling on people's trust — something that the insurance industry is all about at times of high rates of fraud, you might need to supply a police report in order to get your insurance claim paid out.
Do Insurance Innovations Have to Be Costly to Be Effective?
Insurance innovations do not have to be costly to be effective. As these new technologies become more widespread, they're going to cost less to implement. This doesn't suggest a drop in quality.
Every insurance company should look to make use of these technologies. To do this, they can stay up on information with great resources such as insurance podcasts.
What Needs to Be Changed as Soon as Possible?
Insurance companies need to optimize their use of social media immediately. More young people are living at home than they have since the Great Depression. Many of the members of Generation Z aren't quite ready to start planning their future — they don't know how.
If the insurance industry wants to thrive, they have to embrace the youth.
What Are Some of the Trends in Insurance Right Now?
One of the biggest trends in the insurance industry right now is for people to question the utility and use of insurance in general. Many people lost their livelihoods amidst the COVID-19 pandemic, and now the insurance industry has to reevaluate exactly what the industry is for.
People now more than ever are seeking financial independence. They no longer want to have to rely on insurance companies to bail them out.
If the insurance industry wants to survive in this rapidly changing world, insurance companies are going to have to re establish exactly what they're there for.
Understand Insurance Innovations
Technology is always moving forward. All businesses can benefit from technological progress. Insurance innovations are usually present in the world of AI and telecommunications.
Keep up on the most prominent insurance innovations, and you're far more likely to understand the industry.
Are you someone who wants more information on insurance? Or maybe you're questioning the type of insurance you have or the type of insurance you need. Whatever the case, we are here for you. The highly experienced and top rated advisors at Insurdinary welcome the opportunity to open up a conversation with you. Connect with us today.