The Changing Face of Insurance: How Will Insurance Trends Impact Your Business
The evolution of tech and digital capabilities has had a significant impact on industries all over the world. The insurance industry, in particular, has not gone untouched and the technological developments have been a catalyst for a pivot in operations and enhanced customer experience.
2020, and the global sweep of the COVID-19 pandemic have added fuel to the transformation of the insurance industry. Not only has lockdown, and work-from-home changed the way that the insurance companies operate, but how customers view insurance and engage with the companies. Business interruptions, job losses and event cancellations have played a large role in policy cancellations. On the other hand, strict lockdown measures had a positive impact on loss ratios, especially in the case of motor and health insurance.
Insurers globally have therefore felt the need to switch up their operations and strategies in order to stay relevant and compete within the market and industry. We took a look at what the latest trends are for 2021 and how they will impact you, the customer. We took a specific look at how shifts in operations will impact businesses in particular, and what can be expected in the next few months to years when it comes to business insurance.
Table of Contents
There is an Increase in Personalization
In today’s world of COVID-19, as well as big data and digital products, the one-size-fits-all model has become somewhat redundant. What used to work previously, with generalized customer profiles and demographics, no longer applies in the post-2020 world. Big data as well as automation, has reduced dependence on third-party human intermediaries, and the associated costs nullified.
In the case of commercial vehicle insurance, insurers have found that more and more customers have started requesting and opting more for pay-as-you-drive policies. During lockdown, some companies were finding that they were using their assets like trucks and vehicles less and less to visit clients and make sales calls. Others, like eCommerce stores and retailers, were increasing the usage of their delivery vehicles.
Big data also provides in-depth reports and metrics on the usage of an asset, as well as its full lifetime value. So, premiums can instantly be calculated and adjusted regularly according to the reports being received from the insurer. Offerings like “pay per mile” will be more commonplace, and customers will have a lot more control over their insurance policies.
Businesses, in particular, will demand regular in-depth risk analyses be conducted to ensure that the policy reflects the true standing of the business.
Claims Will Be Processed Quicker with AI and Automation
Machine learning, AI, and automation will be some of the biggest drivers of streamlined claim processes. Improved data channels, newer data processing capabilities and advancements in AI algorithms will minimize the human influence in the claims process, reducing the risk of errors and fraud. It will also significantly improve the turnover time of claims with instant access to real-time data and customer history.
AI will significantly reduce paperwork and interactions with brokers, eliminating third-party communication and long waiting periods for payouts. Information will instantly be accessed, analyzed and turned over.
Customers will also have instant, and 24/7 access to insurance providers with the use of bots and apps. Should, for example, the customer’s vehicle be involved in an accident in the early hours of the morning, an instant alert can be lodged with the insurer to notify them of the incident. Emergency services will be dispatched, and should the driver be able to, they could use their app to log details of the incident.
Pictures can instantly be taken and uploaded to the app, statements made, other parties’ details captured and the claim process instantly initiated. Throughout the process, the customer will have a real-time view of the status of the claim and open engagement with the insurer.
Personal Data Will Be More Protected and Fraud Reduced
With insurance processes like automated underwriting process, sales and claims going more and more virtual, and real-time data being constantly collected, the need for customer protection has heightened.
Insurers have real-time and constant access to vital company data, and compliance with various regulations is vital to protect the customer. The focus on regulatory compliance around the collection, storage, management, transfer, sharing and disposal of data has been put in the spotlight.
Key blockchain technology has provided a solution for secure data management across multiple interfaces with the insurer and with various stakeholders. Blockchain, one of the biggest disruptors in the insurance industry, not only heightens security, but streamlines paperwork, and cuts costs for the insurer.
It works by grouping key data and transactions together in a cryptographically protected block with other transactions that have occurred. This information is sent to a network, verified and continuously updated with new data that comes in.
By automating the key functions for the insurer, like the collection of data, management of claims, and claim payout, blockchain removes the human element. This means the reduction of errors and mistakes, fraud and long tedious processes. The encryption capabilities heighten the protection of the data being collected and managed, securing vital customer data.
InsurTech Partnerships Will Increase Innovation
The insurance industry has not been particularly renowned for its leaps and bounds in innovation historically. But by partnering with insurance and tech companies, insurance offerings to its customer bases will start increasing drastically to start keeping up with the fast-paced customer.
Options like smart devices in vehicles to offer tracking, incident alert and monitoring solutions significantly heighten insurance offerings. InsurTech partnerships increase the agility of the insurer, heighten the customer experience, and allow both the customer and insurer scalability with next-generation offerings.
Key drivers of the InsurTech partnership are the increase in smart and mobile devices, the Internet of Things as well as increased connectivity. Big data, AI and automation all come together to allow these partnerships to disrupt the industry for a heightened experience for the customer.
These partnerships put the customer at the center of innovation. They allow insurers to continuously address new and emerging risks, improve transactions and communications, increase agility in engagement and promote the personalization of services.
Disruption in the insurance space has been somewhat slow for the last decade, with insurers hesitant to take up key technologies in their field. However, COVID-19 acted as the catalyst for a significant acceleration of the adoption of technology. Not only does the insurer need to cater for internal adaption like cloud enablement to continue functioning during a challenging time, but they have had to become more customer-centric. As a business, this means heightened self-service, automation and intuitive data to streamline your insurance experience. With the continuous evolution and disruption in the industry, you can expect brisk service, heightened convenience, and flexibility of your insurance products.
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