Our world is changing fast and technological growth is leading to changes in all business sectors.
The aim of these changes is to make the process of purchasing products and services more convenient, cheaper and smarter. Regarding the insurance field, the introduction of new technologies to the market is expected to benefit insurance companies, insurance agents, and most of all, the insurees themselves.
Several relevant technologies and trends in the field are creating a real revolution in the insurance field.
The Digitization of Processes
The innovative digitalization we’re now witnessing helps insurance companies and agents in the processes of registration, customer service and claim management. Insurance companies and agents now benefit from digital means for managing effective and valuable processes.
The NationWide insurance company, for instance, uses Amazon’s Alexa device to encourage good driving habits by offering incentives and discounts on insurance premiums. As a result the insurance companies save money in damage payments and customers pay less for premiums.
The use of digital means makes it possible to offer products and services to potential customers while providing them with more information and making processes more efficient, faster and cheaper for everyone involved.
Multi-Channel Communications and Consumer Behavior
Connecting through social media, cellular applications and chat-bots is a new way to communicate with customers and potential customers – especially the sector known as Millennials or Generation Z – people born in the 2000s who are interested in convenience and personalization of the services they receive.
Companies that have adopted digital innovation have begun to build more personal relationships with their insurees while improving service and retaining customers through apps and social media which enable them, among other things, to reach a new sector which conducts most of its transactions through these means. These clients are looking for faster processes and more efficient and personal communication. A successful example of this is an Australian app called Trov, which lets potential insurees photograph an item they want to insure and receive a price quote for the policy.
Modern technology provides insurance companies and agents with tools which can make their work more effective. Among these tools are some fairly simple things such as the automatic filling out of forms or the use of chat-bots for answering customers’ questions.
The use of artificial intelligence is expected to increase over the coming year and it will also be possible to use AI to make decisions and determine prices and premiums.
The Liberty Mutual insurance company is currently working on encouraging safe driving habits through the use of an app based on artificial intelligence. Furthermore, Allstate has developed a system intended to provide agents with relevant information through an AI-based system, making it unnecessary for agents to contact the insurance companies with questions and requests for information.
The Internet of Things
The internet of things is a revolutionary technology which uses sensors and telemetric devices to allow objects to communicate among themselves, thereby facilitating the collection and interchange of data as well as the automation of processes.
Firstly, the technology facilitates risk assessment based on reliable, precise, continually updated data, allowing for more exact pricing and more efficient claim management. Secondly, the technology makes it easier to understand customers’ needs, allowing for the personalization of insurance services and products.
Personalization of Premiums
An important trend in the use of the technologies described above, especially the internet of things, is the ability to adjust insurance products to customers’ personal needs.
This is done through the use of data received through both the internet of things and applications, making it possible to calculate risks and create a personal profile so that the data can be used to set personalized prices.
American insurance company John Hancock, a pioneer in the use of IoT technology, has begun to give its customers FitBit bracelets which are used to monitor activities and encourage a healthy lifestyle. The aim of this campaign is to reduce the chances of future claims.
New Insurance Models
Technology is creating new opportunities in the field of insurance. The modern era has brought about a need for new insurance models, and insurance products that never existed before are being created. One example of this is cyber insurance which protects both companies and individuals from digital attacks and hacking.
The cyber insurance market is growing at a dizzying pace and there are now many types of insurance in this area, including: insurance against hacking and data loss, insurance against the theft of credit card details or personal details, as well as other types of auxiliary insurance.
Another type of new insurance model is the “all-inclusive” model – a single insurance package instead of a set of specific, different policies.
Japanese insurance corporation Sompo – one of Japan’s three biggest insurance companies and one of the biggest insurance companies in the world – recently opened an innovation center in Israel with the aim of utilizing Israel’s plentiful knowledge in cyber and the digital realm as well as other areas to create new solutions in the fields of insurtech, vehicles, blockchain, cyber, technological solutions for the elderly and digital medicine. Sompo’s sales currently stand at about $30 billion per year.
Apparently Sompo won’t be the only global insurance corporation to launch an innovation center in Israel, and in 2019 several other companies are expected to follow in Sompo’s footsteps.