How is Technology Changing the Insurance Industry?
What is Insurance Technology or “Insurtech?”
Insurtech is innovative technology enhancements for the insurance industry designed to do everything from lowering insurance carrier costs to improving efficiency and overall customer experience.
Types of Insurtech
Telemetry
Telematic systems are designed to collect, record, monitor, and transmit data. Within the insurance industry they are most commonly used in vehicle monitoring systems.
Nationwide already has a pay-per-mile product available while most other carriers offer some kind of telematic based discount program. Insurance carriers are able to use this telematics data to determine a more individualized rate for the end consumer, which can be a huge benefit to those who drive less and/or with safer habits. The more data an insurance carrier is able to gather, the deeper they are able to go with discounts. However, most people agree the downside of this is eventually these programs will be mandatary, (as they are currently optional) allowing insurance carriers to charge more for those who drive more miles or have more reckless driving habits.
Claims processing can also benefit greatly from the data gathered from these telematic programs. The data could help determine fault in an accident, reduce fraud, and could even help in dispatching emergency services when required. All of these Insurtech improvements contribute to insurance carriers being able to individualize your rate while creating a better ROI for both parties.
Robotics and other connected technologies
Insurance carriers are more commonly using robotics and other connected technologies to help underwrite policies, assess risk, and aid in the claims process.
Think about how easy it is to find photos of your home online these days. All you have to do is google your address. Insurance companies can use this readily available technology to help assess the risk of an individual. They can also use something more advanced like water safety sensors in your HVAC system or drones to inspect a roof. Even connecting to advanced security systems like cameras and sensors when granted access. All of these lower costs and reduce processing time for insurance companies. We’ll talk more about why that’s important to you in a minute.
Artificial Intelligence
There are two types of Artificial Intelligence that are crucial to insurance technology: Machine Learning and Personalized Self Service.
Machine Learning
With machine learning, insurance carriers are using data they gather to help improve their modeling and predictive risk analysis. Those models combined with recent past results, help determine what happens to their products price points in the future.
Artificial Intelligence
Of course nothing can replace having an experienced insurance advisor in your corner. But what happens when you need an insurance card on a Saturday afternoon or have a time-sensitive billing issue on a holiday? Most carriers have customer-facing web portals, apps, or even have chatbots available to help with these pressing issues. These technologies help solve that unsettling time gap between the incident and when you’re actually able to have a more consultative conversation with your local agent.
Why does all this matter
There are a couple different reasons why Insurtech matters. Clearly, more options are great for the end consumer. Having different Insurtech available lets you pick those options and customize them to best fit your situation.
These technologies also lower-cost and improve efficiencies and competition among insurance carriers - which will inevitably benefit the consumer as well. Lower cost factors on the carrier side help keep consumers rates low as well as R&D improvements lead to a better customer experience for you!
With that being said, these technologies and services are not necessarily “new” as much as they have been accelerated and promoted in the last year due to COVID-19 and the push to make services more virtual and self directed. COVID has really transformed every industry, every aspect, and every part of our lives whether we realize it or not.
Insurance Technology will not go away, it will only continue to grow and change our industry as we know it. It is our job to stay ahead of the curve and keep you informed about the latest trends and overall insurance news you need to look out for!