In the age of technology, it's important for every type of business to make its presence known on the web and to use technology that helps it to work more efficiently and create more convenience for its customers. The insurance industry is no different. There is a wide variety of ways that technology can work for insurance businesses.
What Is Insurance Technology?
Insurance technology, which is commonly referred to as insurtech, is a term that includes a wide range of the most up-to-date technologies that work in the insurance industry. It includes smartphones, online policy handling, wearables, claim acceleration tools, and more. It may also refer to a range of native agencies that have entered the insurance industry.
- Future Techs
- Regulations and Laws
- User Journeys
- Data and Analytics
- Internet of Things
- Information Security
The History of Insurance Technology
Insurance technology mostly came to be because of government regulations. Insurance providers needed a better way to keep abreast of the changes in the regulations. Additionally, the insurance industry continued to increase in size, which gave entrepreneurs the idea to create new insurance technology. It began in the health insurance industry and then made its way into other insurance sectors, such as property, life, and auto insurance.
Insurance Technology Is Revolutionary
All types of technology provide services that consumers need to have a convenient, streamlined experience with businesses. Insurance technology takes it a step further than simply delivering products online. It impacts the value chain deeply. The automated-only approach it uses helps to reduce costs, streamlines operations for customers, and provides more competitive prices. Insurance technology can also personalize product offerings using data analysis to determine which clients need which products.
How Insurance Technology Works Today
Today, insurance technology is a $5.5 billion-dollar sub-industry and is expected to be worth more than $10 billion by 2025. This is due to an increase in demand for technology that streamlines business processes, especially simplifying the claims process. Payment processing technology is also in high demand as it makes transactions easier for both the client and the insurance company.
Insurance Technology Creates New Business Models
Experts predict that about 60% of current insurance business models will become obsolete within the next decade. Big competition, new technologies, and changes in how the consumer prefers to do business mean that insurance companies need to take on more consumer-facing, flexible business models. There is a wide range of options.
- On-Demand Insurance – This type of insurance lets people purchase coverage only when they are at risk. This could be in the form of microinsurance (small-risk coverage) or gig economy insurance (covers independent contractors).
- 'Peer-to-Peer Insurance – This allows people to access insurance at lower costs by letting groups of policyholders pool their premiums.
- Technology Enablers – These address industry challenges by creating new digital experiences and refining the traditional methods of interpreting data, enhancing portfolios, and underwriting processes and pricing models.
Trends in Insurance Technology
It is important that insurance companies pay attention to the trends in insurance technology and implement them as needed to keep up with the competition. One of the biggest trends in insurance technology is artificial intelligence. AI allows insurers to use automation for everything from answering customers' questions to detecting fraud.
Real-time Internet of Things data is also an important trend. An increasing number of people are wearing technology that collects data. Insurance companies can use this information to determine risk pricing, underwriting, and mitigation. It also allows them to provide real-time, on-the-spot health advice, accident assistance, and even provide advice for drivers.
Robotic Process Automation is another important trend. In fact, it was the most widely adopted one in 2020 and continues to grow. It lets insurance providers automate workflows and has cut processing time by an average of 50%.
Changes in Insurance Technology Are Inevitable
As technology becomes more advanced in general, so will the way insurance technology works. Insurance companies must stay on top of the trends and use technology to their advantage to remain successful in the industry.