Insurance & Tech
Insurance companies, as a whole, recognize the need to digitize. Insurance companies in the US have increased their investment into tech by 60% in the last three years. Insurance companies in Asia, however, have tripled their investment into tech at the same time. The aim is to modernize existing systems and configure new systems, better serve, and meet the needs consumers. Let us now look at some areas where technology is being implemented to move forward to this trillion-dollar industry.
Internet of Things (IoT)
One of the main problems preventing insurance development in developing countries is that income is not guaranteed. According to a study in 2019, more than 60% of the population in Asia, Africa, and India have unstable incomes. It makes it harder to commit to paying your monthly premiums. The technology of connecting all things (IoT) is becoming a bridge to solve this problem through the application of smart wearable devices and other mobile telecommunications devices. Agents can now use this data to provide their customers with personalized insurance products based on actual usage. For example, MyDrive provides IoT solutions to car insurance companies to control the driving behavior of customers, and thereby allow them to enjoy insurance packages based on actual usage and level of individual risks. Another initiative from Beam, which uses smart brushes to track the insured's brushing habits and provides additional incentives to encourage maintenance of oral health. The application of IoT technology is endless. The amount of data collected over time will create a major competitive advantage for digital insurance companies compared to traditional companies in the field of risk analysis.
Artificial Intelligence (AI)
Artificial intelligence (AI) is another buzzing sector that helps insurance companies reduce costs and increase business efficiency. AI can be applied in many ways from Chatbots to fraud detection tools such as facial recognition, voice, or high-level data analysis systems. When combined with machine learning algorithms, artificial intelligence (AI) can improve itself over time to become "smarter". In terms of the long-term, this improvement will certainly create great potential, but this technology solution is dependent on the data source. Therefore, solution architects must grasp this requirement to create a competitive advantage for themselves. Carpe Data has expanded in the Service Software (SaaS) model, providing data as a service (DaaS) to provide the insurance companies with a wealth of useful information that contributes to the accuracy of the technology.
Data security has become a hot topic in recent years with the vulnerability of having personal information unwillingly disclosed due to loose security regulations. A solution has been developed from Blockchain technology using an electronic ledger to prevent fraud, allowing it to be easily verified, and distributed to multiple servers. Lemonade is one example of a leader in applying Blockchain to the property insurance industry. Their business model distributes the monthly premium to the Smart Contract and when a claim is accepted, the money is redistributed to policyholders within 3 seconds. Insurance experts label Lemonade as a "disruptive" insurance industry because of Lemonade's approach to technology and customers. Lemonade also donates unused premiums to charities established by Lemonade's insurance policy owners, determined to change the way consumers view the market. All of these activities are aided by blockchain technology thanks to the transparency of distributed ledgers. Blockchain technology has also been applied in many other service insurance industries, such as marine insurance (Guardtime), title insurance (First American Financial), travel insurance (Fizzy), and Unemployment insurance (Dynamis).
Automation is a rapidly growing trend in the field of digital insurance. Traditionally, the insurance industry has always been stymied by a large number of books and records that come from insurance companies, medical providers, and other systems. These result in man-made errors when working on paper and entering data into the system. Thanks to the transformation of several processes that rely heavily on paper and data forms can now be automatically imported, checked, and validated using specific criteria. Even in cases when digitizing forms is deemed impossible, an example such as optical character recognition (OCR) can convert handwritten forms into structured digital data format, thereby reducing manual input. It creates the potential to reduce staffing costs, data entry errors, easy storage, and retrieval of data.
Quoting Richard Branson, “If somebody offers you an amazing opportunity but you are not sure you can do it, say yes – then learn how to do it later!”. Insuree is on track to provide more breakthrough solutions and we would like you to walk on this journey together with us. Take a small step toward your goal today, who knows, when you look back, you could have changed the world.