Technology
What You Should Know About InsurTech Trends
The insurance industry faces numerous challenges all the time. From disrupting technological innovations to rising customer demands to political and regulatory issues, underwriters have to deal with problems and compete with market rivals. In this case, the winners are those who can distinguish emerging trends and get the maximum benefits out of them.
Mainly, it’s possible to boost the growth of the company by utilizing modern software apps. Insurtech systems help in different ways, e.g. they automate policy life cycle stages, gather core data in one place, and manage customer relations. To implement the most useful applications, you want to know the most recent development/usage trends.
In the guide, we use insights from leading analytical firms like KPMG, PWC, and EY, plus our own studies.
1. AI and Machine Learning
Let’s begin with relatively simple tech stuff. Sure, AI is a buzzword of the last ten years or so. Many industries try to adopt this technology and we actively use artificial chatbots, consultants, and prediction systems. Insurtech developers also introduce AI-driven solutions in two key directions:
- Analytical software. Utilizes machine learning to make accurate market predictions and help underwriters in unveiling upcoming customer needs.
- Robotic process automation (RPA). Handles daily stuff like notification, task tracking, reports, and simple interaction with users.
As the first approach requires significant resources and knowledge, it may take a while until true AI insurance platforms. Wherein routine automation tools are included in many insurtech packages already.
2. Fully Automated Systems
Continuing the idea of RPA, experts from KPMG say that this trend can go way further. Starting with regular processes, it will spread on other aspects. As a result, insurance platforms of the future have all chances to function seamlessly without manual control at all. From the first advertisement to policy renewal, the whole customer journey will be based on interactions with machines. Self-service platforms will rise, as well.
3. Higher Attention to Cybersecurity
EY researchers state that 76% of surveyed companies have increased their security budgets after facing a serious breach. Means, more than 2/3 of modern businesses faced a successful attack or, at least, an attempt. According to the same report, cybercriminals aim to get a customer and financial info, which insurance enterprises collect; hence they are perfect targets.
Undoubtedly, we will see the rise in cybersecurity measures during the next years. Experts suggest focusing on proactive strategies to prevent the tiniest possibility of a breach. Overall, it’s more effective to protect the company beforehand than return stolen data or money. New technologies like blockchain or AI can boost security, too.
4. IoT and Wearables
Accumulation of different data leads to more possibilities but also more responsibilities. To remain competitive, insurance groups should look at the Internet of Things and wearable devices. Here are the most important insights on them:
- IoT devices at homes. Smart bulbs, cameras, sensors, and locks help a lot when you need a full vision on the property. By sharing this data with P&C agencies, owners can get better offers based on their current needs.
- Health tracking wearables. Innovative fitness bracelets and smartwatches are amazing. They count calories, check your sleep quality, monitor heart rate, and can even detect diseases. Info from these gadgets is indispensable for H&L insurers.
Combined, these two markets can provide a huge amount of valuable data about each client. Thus, underwriters will deliver more personalized policies. Simultaneously, customers will get their personal info at fingertips thanks to new privacy standards.
5. Middleware Solutions
One of the biggest obstacles for insurers is the dependence on legacy systems. A lot of them were developed in the 2000s or even earlier. Of course, they can barely meet the new market conditions and customer wishes.
To switch to new insurtech systems, companies cooperate with dedicated developers. However, it’s not an easy task to replace an outdated platform with tons of sensitive data. Thus, programmers utilize middleware that leaves ongoing business processes undisrupted, provides for smooth data migration and simplifies access to information. Efficient middleware means 50% of the whole system’s success so devs should pay attention to this layer.
6. New Era in Automotive Insurance
Talking about exact market sections, we can’t miss the tendencies in auto insurance. Today, agencies tend to move from protecting individuals to insuring the vehicles. Honestly, the direction of this trend is pretty unclear. The most likely consequences are as follows:
- Separate insurance ecosystems launched by manufacturers and/or dealers.
- New regulations and rules for insured driverless cars and their passengers.
- Flexible policies that allow a driver enabling and disabling vehicle insurance.
7. Outsourcing
Despite the market’s size of outsourced services was slightly lower in 2018 compared to 2017 ($85.6 billion vs $88.9 billion), enterprises require external employees. Particularly, insurance agencies delegate the development of modern software, re-engineering, data migration, updating, tech maintenance, and so on. By outsourcing these tasks, underwriters are able to focus on customer satisfaction.
Top-rated destinations include regions with relatively low costs of living such as Eastern Europe or Southeast Asia. For instance, software development Ukraine teams are well-known thanks to high professionalism combined with low rates. Indian or Filipino workers’ labor maybe even cheaper, but it’s important to remember about the time and cultural differences, as well. For insurtech products, devs must understand the target audience.
8. Real Customer-Centricity
The idea of the highest customer value isn’t new. The catch is that almost all insurance teams didn’t clearly realize how it works, so we didn’t see groundbreaking results. Now, the situation begins to change. Earlier, the main relationship focus was on policy renewals and claims payment, but today, insurers enable more interactive approaches.
For example, the market experiences more on-demand offerings. Means, customers aren’t bound to the benefits as they can insure health or property only when needed. Going on vacation? Turn on the policy for your camera and order personal travel insurance. Later, you can toggle them off to avoid unnecessary spending.
Moreover, this centricity refers to overall convenience. The mentioned enabling/disabling of benefits is now possible via different channels: desktop, mobile, in-person, etc. Modern insurtech systems move towards the new interaction model in which clients will get more and more control over their benefits and data.
9. Shift to Acceptance
Finally, the world starts accepting new things. PWC studies show that underwriters are less concerned about innovations. Here are some numbers (percent of respondents that are frightened by each point):
- Concerns about tech progress speed: 51% in 2018 and 31% in 2019.
- Concerns about new customer behavior: 31% in 2018 and 21% in 2019.
- Concerns about new market players: 22% in 2018 and 10% in 2019.
It’s probably the most important trend for all parties. Insurance teams are more likely to implement innovations, so insurtech builders can deliver more new platforms to more partners. Clients will benefit from this state, as they can access more convenient tools for self-management in terms of benefits and policies.
Conclusions
The world’s changing. Insurers have to introduce new and new stuff to retain their clients and attract new ones. Understanding modern trends emerging in the insurtech sector, business owners can choose the best direction for their teams. When it’s not guaranteed that each new technology will succeed, innovative software shows great results as it boosts customer happiness and improves business processes. Keep an eye on the trends to know where to move your enterprise.
