More businesses are finding the benefit of artificial intelligence and machine learning to expedite their services and better utilize the raw data that is at their disposal. The insurance industry is no exception to this digital transformation.
From the underwriting process to customer service, insurance companies are taking big data and turning it into the analytics they need to better understand risk and their customer base. Here are a few things you need to know about this insurance technology, better known as Insurtech.
Insurance technology is growing all the time, developing a disruption in the marketplace that takes real-time numbers and turns them into analytic models for the benefit of a business. But what is Insurtech? It’s about using technology to explore new options outside of traditional human efforts. This could include dynamically-priced insurance policies and provides insurers access to data streams from Internet of Things devices. This creates a dynamic pricing system based on the insurance marketplace and consumer behavior.
Artificial intelligence through insurance technology uses automation for human functions to gain quicker and more accurate responses. One of these new technologies is the use of chatbots to help potential customers navigate an insurance company’s website to evaluate their options.
Machine learning, a subset within AI, help collect vast amounts of data that can extract valuable information for modeling. Demand modeling can estimate premium amounts, and anticipate risks based on location or other attributes. With data analytics, insurers can get deeper insights into customer needs and targeted insurance products and services.
Applications of Insurtech
One of the greatest Insurtech trends is the use of artificial intelligence to verify customer identity. The Know-Your-Customer process is an important part of customer identification that has to be completed by insurers, reinsurers, and brokers. Insurance companies have to collect all information to verify identities, which means dealing with a sizable amount of data.
Some Insurtech companies have used blockchain technology to develop software that stores customer identification details from issuing authorities. Insurance providers use the same blockchain technology to create a standardized claims document that underwriters can evaluate in real-time.
This automates smart contract elements to ensure execution of the claims process is flexible and transparent. Smart contracts have automated protocols that make it easier for insurers to authenticate, negotiate, and even enforce documents.
Companies can register contracts and run authentications for a cleaner and easier process, reducing the likelihood of fraud and increasing customer satisfaction. It’s especially beneficial towards fraud detection, weeding out the large number of claims that are false through easier authentication in the insurance sector. This spans into streamlining the payout of claims and the accrual of premiums from the insurance customer in a timely fashion.
Benefits of Insurtech
These innovative technologies are paving the way for insurance technology to elevate insurance carriers to the next level. Insurtech is driven by consumers, allowing them to place value on any aspect of their life. This includes a more comprehensive insurance coverage based on who would fall under your policy.
Consumers are a part of the process from registration to claims, enhancing the level of knowledge brought from insurance professionals to their customer base to better engage the benefits for policyholders. This has expanded to easier access in customer service through smartphone apps and real-time information on a claim.
For insurance providers, Insurtech saves time and money by keeping fraud at bay through customer identity verification. Insurers can also simplify underwriting by automating information collection and promoting innovative new products with smart contracts that go beyond the traditional claims process. By automating claims, the Insurtech community is working to reduce errors and automatically effort contracts. No matter the line of insurance, this makes for a better customer experience.