The Future of Insurance Industry

 

Chinese insurers are poised to compete in emerging markets. For example, Ping An has expanded in Southeast Asia via technology. The insurer has partnered with Grab to provide telemedicine services for people in Indonesia. Insurtech leaders are beginning to think big, but start small. They are embracing emerging technologies like artificial intelligence and the Internet of Things to grow their businesses. Here are some key trends in the insurance industry that we will continue to follow.

Insurtech leaders think big but start small

Insurtechs are the embodiment of the next-generation entrepreneurial culture. Founders often have experience in insurance companies or software development, and they are not weighed down by heavy investment requirements and operations. Instead, insurtechs are able to take risks and adapt to new experiences. Insurtech leaders think big but start small and embrace the start-up culture of the digital era. Here are some of the characteristics that make insurtechs special.

Unlike their predecessors, insurtechs no longer aim to be point solutions. Instead, they are trying to build a technology platform that will support the insurance industry. While the overall landscape of insurtechs is slow to change, new types of insurtechs are emerging. One such type is the claims platform. It is possible to create a system that will serve as an insurance ecosystem, bringing new benefits to consumers while reducing costs and increasing efficiencies for the industry.

Data is the most important asset in the insurance industry

Increasing competition is forcing insurers to reinvent themselves as customer-centric organizations. Their core organizing principle is customer serving, which means they must improve their agility to respond to market changes and new regulations, improve their customer experience, and deliver new customer-centric products and services with predictable costs. The most effective way to achieve this goal is by harnessing data and applying new analytics capabilities. But there are many challenges associated with this endeavor.

The insurance industry has spent decades building its data management capabilities. While legacy companies were organized by product groups, diversification and mergers have created countless data silos. Today, data integration is even more critical as streaming data creates challenges for the insurance industry. To effectively analyze this data, insurers need new analytics and information management capabilities. Hadoop and MapReduce are examples of such technologies, which provide the framework for analyzing big data. Text analytics and NoSQL are also extensions of information management environments.

Artificial intelligence

The insurance industry is still recovering from a post-pandemic crisis. While many companies are now facing new challenges, AI is showing significant promise in the industry. AI can help insurers improve their customer experience, reduce costs, and improve operational efficiency. Companies can use AI for many purposes, from customer support to underwriting to predicting risk. However, there are several concerns associated with AI. In order to avoid these concerns, it is crucial to understand the benefits and risks associated with AI and insurance.

AI is already transforming many industries. In the insurance industry, AI can automate tasks that previously required human expertise, such as underwriting and claims processing. AI can also analyze legal documents. In the insurance industry, AI will improve customer experience by identifying customers, processing customer service inquiries, and detecting fraud. It can even be used to enhance customer service with virtual assistant chatbots. Insurers can now offer personalized service to their customers around the clock by using AI.

IoT

With the Internet of Things (IoT), the auto insurance industry can better understand their customers and predict potential risks. Traditionally, insurers measured driver risk by using public and easily accessible variables such as age, gender, credit score, and the type of car they drive. With IoT, however, insurers can gather additional information about a customer to better tailor their policies and offer more personalized offers. For example, they can offer special discounts to people who drive safely, while simultaneously ensuring that the insurance company has accurate data on their clients.

By collecting data on a policyholder's habits and behavior, insurers can reduce their costs and increase their customer satisfaction. IoT devices are becoming more affordable, which makes them a viable business decision for any insurer. It also offers insurers the opportunity to implement usage-based pricing models and improve their interactions with customers. One such InsurTech company is Cozify, a platform that helps insurers collect data on a policyholder's daily activities and habits.

Embedded insurance

Embedded insurance offers new ways to reach customers online, allowing insurance to become part of a customer's experience, rather than a cost. In addition, insurers can partner with digital brands that already have a vast customer base and offer insurance within a seamless user experience. Embedded insurance offers a variety of benefits for insurers, end-users, and 3d-party distributors.

Embedded insurance is an increasingly common concept in financial services and digital health providers. By pooling data from multiple systems, savvy insurers can develop more informed relationships with customers and offer more coordinated risk assessments. Embedded insurance has already begun to take hold in Asia, where insurers are rapidly transforming the way they deliver insurance to consumers. Ping An Insurance Group, for instance, is the world's largest embedded insurance provider, operating a range of complementary sectors that seamlessly integrate insurance offerings. Similarly, China's Ant Group controls a comprehensive financial ecosystem through its digital payment super-app Alipay.