Today’s insurance companies continue to embrace new digital technologies. The emphasis is now on usage-based coverage and tailored premiums.
By utilizing advanced analytics, IoT, and machine learning, more tailored risk profiles can be used to improve the delivery of services. This blog explores five top insurance trends on the rise for 2020 and 2021.
1. Innovative models delivering tailored products
The digital economy has taken the insurance industry by storm. On-demand and individualized insurance products are now more prevalent and part of the daily experience.
For example, instead of a strict medical insurance policy, hybrid insurance policies provide a blend of healthcare and life insurance benefits. If you choose, you can use up the value of the policy over time for long-term healthcare, and/or leave some or all of the face value as a death benefit.
In the last two to three years, insurance companies have blended these types of policies to provide a more customized experience for the consumer. Since over 80 percent of premiums are lost to distribution costs, API digital models will make human-based intermediaries obsolete over time.
2. InsurTech joint ventures
InsurTech companies are growing exponentially in the areas of the home, auto, and cyber insurance.
Growth of this magnitude motivates traditional insurers to either purchase technology capabilities or form a partnership to meet the demands of an ever-increasing millennial market.
Traditional insurers profit from accelerated results by instituting an advanced tech culture. This gives rise to innovative models and higher profitability as a result. By providing a healthier bottom line, the customer gains a streamlined experience that is enhanced by superior services.
3. Faster delivery for better claims: AI & Automation
AI and Robotic Process Automation (RPA) continue to take center stage. With new drivers and data channels, insurers gain better data processing proficiencies and improvements in AI algorithms and economic data.
By reducing customer engagement and experience costs, this trend drives improved results and efficiencies for market competitiveness.
4. Proactiveness, futureproofing, and analytics
With premiums becoming more personalized, new technology sources are entrusted as innovative sources for insurance providers. Technology such as mobile-enabled apps and IoT are just two examples of technology, making insurance more agile and scalable for customers.
Drone and imaging technology enables insurers to have access to HD images for remote and precise analysis, along with property estimations, increasing the accuracy and timeliness of claims settlement.
P&C insurers are now able to take out real-time data on the loss of exposure of individual consumers, helping them to answer questions accurately and swiftly.
Keen insights are being built through data-set associations to create a deeper overview of individual risk profiles to safeguard insurers from developing risk possibilities.
Drone technology is a helpful source of technology for digital claims processing. During events such as Hurricane Harvey, insurers could assess the damage rapidly and with accurate data, as claims staff were unable to get on-site to assess damaged properties.
As an example, an Australian insurance company could solve about 90 percent of claims within 90 days thanks to drones. The bottom line is it cuts down on manual and time-intensive processes, hence reducing the paper trail to the consumer and saving you money.
You get exceptional customer service as the insurance company can reduce costs by doing risk analysis of their claims processing. For the insurance company, there’s a significant uptake in risk management and they can obtain and analyze data in real-time.
5. Innovation DNA
Insurance companies in the past have been legacy brick-and-mortar environments. Today, the culture is rapidly changing as they embrace innovation as their corporate DNA.
With an API-first approach, insurance companies can mature their digital experience and embrace new technologies to extend the customer experience in a competitive market.
For example, Northwestern Mutual realized they had to respond to this trend to compete in the marketplace. They acquired LearnVest™ as part of their move to digital, and the result is a powerful app providing a “single pane of glass” on not only assets directly managed by them but also the capability to incorporate information on assets held at other financial institutions.
Investment management companies continue to embrace an open data access mentality to deliver innovative new services and increase their customer experience.
As we see with fintech and banks today, insurance companies continue to partner with other companies to provide enhanced and groundbreaking customer experiences that enable stronger abilities for faster solutions and revenue streams. Insurance companies that take the lead will be at the forefront to succeed.
Discover six reasons APIs are taking digital insurance to the next level.