The insurance industry, like so many others, is being rocked by technological innovations. It’s changing the way that insurance is being sold, claims are analyzed and support is provided. Many startups and small, innovative businesses are revolutionizing the insurance industry.
Let’s look at what these changes are and see how they're altering the insurance sector.
During the pandemic, the insurance industry was forced to pivot to be much more digital, as everyone was forced to stay at home. This change meant insurance companies had to adjust how they work for employees – and for customers. Only 29% of insurance customers were satisfied with their providers. This dissatisfaction opened the door for the many digital competitors that are arising and shaking up the insurance world.
In 2022 and 2023, the insurance industry struggled with the pandemic's aftermath. Insurance executives also tried to get to grips with the personalization that their customers now expected. Studies found that 88% of clients wanted more personalization, and 78% said they were more likely to respond to it. This trend for more personalized adverts and information means that the insurance industry needs to use its consumers' data more strategically.
In 2024, the need for artificial intelligence (AI) is at the front of insurers’ minds. How can they harness it? How can AI be used safely and effectively? Since AI can analyze huge amounts of data, the technology can free up insurance pros to focus on strategy.
The outlook for the insurance industry is tough. Climate change has been pushing insurance companies to adjust premiums and create new policies. Wildfires are becoming more severe, hurricanes are increasing, and storms are getting stronger.
The increase in materials’ prices is also affecting the insurance industry. The material costs for cars and building homes have soared. According to Deloitte, the price of residential home construction materials soared 33.9% since the start of the pandemic. This increase forces insurance prices up as well.
Technology has changed the insurance industry in 3 main ways:
Insurance operations and processes have become more streamlined. This reduces costs, both for space and for employees. It also improves how fast companies can deliver their services.
Digital tools empower you. They let you offer more personalized and convenient service to your policyholders. Harnessing chatbots, and AI improves customer service and increases customer satisfaction.
Analyzing data accurately and quickly improves the accuracy of your risk assessments. Using big data analytics you can also tailor pricing models to your clients.
Now, we'll take a look at how these technological changes affect your insurance business directly. Insurance technology, (or InsurTech) is revolutionizing how the insurance industry manages billing and the claim management process. It's also changing how the insurance industry interacts with customers.
While many consumers still pay with checks, they are unreliable and expensive. Checks are estimated to cost companies 10x more than ACH. Credit cards with a PIN are no longer needed. People can now pay using apps with facial recognition.
Younger generations prefer paying by mobile apps or digital wallets such as PayPal, Apple Pay, and Google Pay. This customer base includes Millennials and GenZ.
Insurers need to accept many payment types. Doing so will help payments and boost your sales.
New payment methods are continually appearing. Amazon is trialing a payment machine that would take payments by reading clients’ palms as confirmation.
Claims processing involves huge amounts of paperwork and many stakeholders. This manual process was ripe for a digital transformation.
You can use software, like Guidewire Claims, to streamline the full claim process. Submitting claims gets easier. You can assign claims to adjusters automatically. The assignments are based on rules that your company can personalize.
If there are any concerns about the claim’s validity, you can pull in other teams quickly to speed up that process.
The biggest benefits are that claims processing and approval become faster. That means turnaround times decrease. This shift increases your team’s efficiency and customer satisfaction.
Customers expect to be able to interact with insurance providers in a stress-free way. Providing several channels for customers to reach you helps. You can offer chat, a ticketing system, and a phone number to call.
To help you manage the volume of chats, you can use a chatbot. In 2023, chatbots saved employees approximately 2.5 billion hours worldwide. 44% of insurance customers reported feeling comfortable interacting with chatbots for insurance claims.
Using a chatbot lets you talk with clients 24/7. It frees up your employees to focus on important cases and streamlines your customer support. Chatbots can be integrated with your CRM, mobile app, and social media. That allows clients to engage with you across channels. It also means that the data is automatically collected for your records.
Artificial Intelligence (AI) and Machine Learning (ML) are enhancing underwriting and claims processing. Insurers no longer need to rely on people to analyze claims on their own. AI and ML can now analyze claimants’ data, and make personalized recommendations based on that information. This technology can improve the accuracy of risk assessments, and help with the correct payout for that claimant. It also helps to flag fraudulent claims and accelerate the claims process.
The Internet of Things (IoT) is a network of objects that have sensors installed and exchange data continuously with other devices. A practical example would be a self-driving car. For example, a car with IoT is connected to the internet to understand traffic when to stop, and the best route to take.
In insurance, IoT offers insurance policies based on data collected from these IoT devices. These include cars, wearable devices, and home appliances. Insurance companies can collect data and create customizable coverage policies and accurate pricing based on usage.
This InsurTech (or insurance technology) includes blockchain. Blockchain is a distributed, non-centralized database that can’t be changed. Multiple copies are saved in different places, making it crucial for data security.
The insurance sector handles sensitive customer data. Keeping it secure is key for insurers. Blockchain is an interesting solution for insurers as it is decentralized and encrypted. Only members of the chain can access it. That means that the machines that have access to the information can analyze if there have been any changes, and send an alert.
Blockchain can also be used to create contracts, track insurance claims, and expedite claims processes.
n2uitive is an innovative company that pioneered Recorded Statement Lifecycle Management Software. Our solution facilitates the full lifecycle of recorded statements. It’s easy to record statements by a conference call that is recorded, or via our iOS app.
With our software, high-grade security is fully encrypted. This ensures that all your clients’ sensitive information is kept confidential.
To make you more efficient and productive, n2uitive also integrates with Guidewire. Your statements can be automatically and securely synced to your library.
Finally, n2uitive also connects with Allegis. You can request statement transcription from within the n2uitive platform. You never have to waste time downloading and re-uploading documents to different platforms again.
Innovative insurance companies that embrace change will grow and thrive now and in the future. Schedule your free consultation with n2uitive to discuss your current recorded statement process. Discover how we can help you streamline your workflows, improve productivity, and satisfaction.