8 Insurance Technology Trends Transforming the Industry.

Advanced insurance technology is already an integral part of the P&C industry, for both carriers and insureds. Getting insurance quotes can be as easy as clicking a button, managing coverage can typically be accomplished via a mobile app, and paper insurance cards are mostly a thing of the past.
Insurance technology is poised to mature even more. While some of these tools are already employed by some carriers, we see them becoming more and more commonplace throughout the industry. Insurers looking for a competitive edge should consider embracing one or more of these eight emerging insurance tech trends.

Predictive Analytics

Predictive analytics is used by many insurers to collect a variety of data to understand and predict customer behaviour. However, there are new ways it can be utilized to improve accuracy of data.

From 2019, insurance companies has been using predictive analytics for:
• Pricing and risk selection
• Identifying customers at risk of cancellation
• Identifying risk of fraud
• Triaging claims
• Identifying outlier claims
• Anticipating trends

Artificial Intelligence (AI)

Consumers are always looking for personalized experiences, especially when purchasing something as important as P&C insurance. AI offers insurers the ability to create these unique experiences, meeting the high-speed demands of modern consumers.

With AI, insurers can improve claims turnaround cycles and fundamentally change the underwriting process. AI also enables insurers to access data faster, and cutting out the human element can lead to more accurate reporting in shorter periods of time.

A report from PwC forecasted that AI’s initial impact will primarily relate to improving efficiencies and automating existing customer-facing underwriting and claims processes. Over time, its impact will be more profound; it can identify, assess, and underwrite emerging risks and identify new revenue sources.

Machine Learning

Insurance technology trends will include the overlapping of various technologies, all in the name of improving accuracy. According to Forbes, “Machine learning is technically a branch of AI, but it’s more specific … Machine learning is based on the idea that we can build machines to process data and learn on their own, without our constant supervision.”

Machine learning can not only improve claims processing, it can automate it. When files are digital and accessible via the cloud, they can be analyzed using pre-programmed algorithms, improving processing speed and accuracy. This automated review can impact more than just claims – it can be used for policy administration and risk assessment.

IoT

Most consumers are willing to share extra personal information if it means saving money on their insurance policies – and the Internet of Things (IoT) can automate much of that data sharing. Insurers can use data from IoT devices such as the various components of smart homes and wearable technologies to better determine rates, mitigate risk, and even prevent losses in the first place.

IoT will bolster other insurance technology with first-hand data, improving the accuracy of risk assessment and giving insureds more power to directly impact their policy pricing.

Social Media Data

Social media and its role in the insurance industry is evolving beyond marketing strategies and clever advertisements. Mining social media data is improving risk assessment for P&C insurers, bolstering fraud detection capabilities, and enabling entirely new customer experiences.
Take the Dutch insurance company Kroodle, for example. Their process of interacting with customers is entirely accomplished via social media. Customers log in using their Facebook credentials, and they file claims, get quotes, and request other services via a Facebook app.

Insurance technology can also leverage social media to investigate fraud. Insurers can look at the social activity of insureds and compare it to claims records, looking for any discrepancies. A Morgan Stanley report cited a tool utilized by carriers to investigate claims throughout the assessment process that examines the social relationships between parties involved – and monitors their activity on the day of the loss to look for red flags.

Telematics

Auto policies will continue to be impacted by telematics capabilities. In insurance technology, think of telematics as wearable technology for your car. Cars equipped with monitoring devices — think Progressive’s Snapshot — measure various indicators such as data on speed, location, accidents, and more, which is all monitored and processed with analytics software to determine your policy premium.

The benefits of telematics are numerous for both insurers and insureds. Telematics in P&C insurance will:
• Encourage better driving habits
• Lower claims costs for insurers
• Change carrier to customer relationships from reactive to proactive

Chatbots

By some estimates, by 2025 95% of all customer interactions will be powered by chatbots.
Utilizing AI and machine learning, chatbots can interact with customers seamlessly, saving everyone within an organization time – and ultimately saving insurance companies money. A bot can walk a customer through a policy application or claims process, reserving human intervention for more complex cases.

Geico’s “Kate” is a virtual assistant that communicates with customers via text or voice, aiding in policy questions and coverage inquiries, available 24/7. More insurance companies are investing in technology like this, and chatbot capabilities are expected to increase.

Drones

Insurers are taking to the sky, or at least their drones are. Unmanned drones are an insurance technology tool that will be utilized more by carriers. They can be used across many stages of the insurance lifeycle – collecting data to calculate risk before issuing a policy, aiding in preventative maintenance, and assessing damage following a loss.

Farmers insurance is a great example, as they deploy Kespry drones to aid risk and damage assessment on homes. These drones perform roof inspections and other assessments, and the drones transmit their data to the cloud for analysis. This is yet another instance of IoT and other technologies working together in the insurance industry.

Conclusion:

P&C carriers are always searching for the latest and greatest developments in insurance technology. It helps them not only stay ahead of their competitors, but also deliver the experiences customers expect in the modern market. With all of the innovation going to market in recent years, from smart home technology to insurtechs and microservices, 2020 will be a very interesting year to watch for insurance technology developments.