Advanced technology is already an essential part of the industry and is assured to mature even more in the coming years. Insurance companies who are up to date with technology will grow at a faster pace. According to recent Celent research, data powers the knowledge for effective discovery in insurance programs while AI and cloud make it cheaper and more efficient to manage risk. These deliver the value that consumers want in todays’ fast paced world: peace of mind; ease of use; and, value for price. As an insurer that is looking to grow, you should embrace one or more of the following technologies.
Insurers process massive amounts of data, including a great deal of information needed from their clients. This data is useful for understanding and predicting customer behavior. For example, to determine which product a customer wants to buy next. Predictive analysis can be utilized to improve accuracy of data such as pricing and risk selection, identifying risk of fraud, and triaging claims.
Artificial Intelligence and Machine Learning
Everyone is talking about AI and ML, yet how to really apply these technologies in an effective manner? According to McKinsey, AI can deliver on industry expectations through machine learning. As a customer, you want to have a personalized experience when purchasing insurance. With AI, insurers can improve the claims process by eliminating a lot of manual work, making the operation more efficient. AI can also change the underwriting process by utilizing data from connected devices, improve efficiency and to detect anomalies. It also enables faster access to data by cutting out human elements leading to a more accurate reporting in a shorter amount of time.
Data should be up-to-date, which is a hard fought battle with the variety of (legacy) systems in place. That’s why solutions that use a hybrid engine, combining expert rules and AI, prove to be very effective.
Looking at Machine Learning, Forbes refers to ML as a branch of AI. That is, AI can perform tasks in an intelligent way, and it can do more by adapting to different situation while ML is based on the idea that we can build a machine that can learn on its own without constant supervision. ML can improve claims processing and automate it. In a nutshell, AI and ML work together to give more accurate results when needed, in real-rime.
IoT (Internet of Things)
With consumers now willing to share some personal information with their insurer in order to save on their premium, the Internet of Things will change the way claims works in the next decade. With IoT, insurers can make use of components of smartphones and wearable technology to give an accurate risk assessment and give the insured power to impact their pricing policy. The challenge here is how do you store this new type of data? Customer data can be stored in a public cloud provided by clouds service providers. For example, by using the Google Cloud Platform to store large information safely.
Embracing the Future
Insurance companies are looking to technology to improve their service, provide greater customer experiences and stay ahead of their competitors. Innovation should be seen as an opportunity rather than a threat. If you are curious to learn more, have a look at this article on the future of insurance fraud analytics.