5 Amazing Insurance Industry Trends in 2020
Thanks to the advent of technology, the world’s insurance market is transforming into a digital-first business model. With this model, the industry’s value has gone up and will continue to skyrocket to billions of dollars. Nowadays, premiums and coverage have become personalized. Insurers are also using technology to analyze risks before offering coverage.
Using hi-tech machines like smartphones and applications like the Internet of Things has become the norm in most insurance companies. The continued use of technology in the insurance industry will give rise to new and better models, high profits, and low operational costs. Continue reading to get insight into five current insurance industry trends.
- New Customized Products
As a digital economy, the insurance industry is coming up with on-demand, user-based, and all-in-one products. Instead of products designed for everyone, customers are starting to enjoy products made specifically for them. Distributing premiums comes with a great cost, amounting to approximately 80% of the collected premiums. But digital insurance models have made such processes obsolete, eliminating such expenses. In the long run, customers will enjoy other viable options like peer-to-peer or microinsurance.
- Quick Claims Through Automation and Artificial Intelligent (AI)
New ways to collect data such as AI and Robotic Process Automation (RPA) have been invented and have helped eliminate fraud and inefficiency. Brokers and paperwork are no longer relevant, attributing to time saving, and less cost. The AI-infused claims determine risks accurately and contributed to achieving more profits.
In the near future, bots will feature in most front and back-offices of insurance companies to help in the automation of policy rendering services. They will also be useful in claims management. Customers will enjoy personalized customer service and quick services. Automation and AI will also create more and new business models and increase market competitiveness.
- Hi-Tech Proactiveness and Analysis
New reliable data from tech sources like the Internet of Things, applications on mobile devices, and wearables attribute to premiums designed for specific customers. Experts on the market like SiFinances.com will cater to all your insurance premium needs. You will also get advice on what best suits your situation.
The insurance industry gets expected to grow tremendously within five years. Insurers will be able to get real-time data about any loss. As a result, they will respond timely and offer personalized help. Devices and gadgets like drones are very practical in providing high-definition images to the insurer, even at places not easily accessible. In return, the insurance companies can carry out the correct analyzes and estimations. They also help quicken a process that would have taken ages to capture the pictures and come up with a review.
The insights gained help in developing telematics devices that are useful in warning insurers of emerging risks. They also offer real-time feedback to motivate safe driving. Studies indicate that these devices and techniques have helped save 40% on insurance premiums.
Advanced analytic also plays a part in classifying customers, optimizing business strategies, adjusting policies and prices, identifying exceptions, and new opportunities.
- Partnerships with InsurTech
InsurTech companies have contributed significantly to cyber, homeownership, and auto insurance. Such developments lure traditional insurers to partner with them or acquire technology capabilities to offer such services. With a high demand for such services and products from digital customers, the partnership is crucial. As a result, both the InsurTech companies and traditional insurers will benefit from each other.
InsurTech firms will enjoy an increased number of customers, domain expertise, and funding, while the insurance companies will enjoy faster results. In return, it will give rise to better and unique models that bring in more profits and are easy and quick to operate. The operational costs will continue declining while customers enjoy better experiences.
- Mainstreaming Blockchain
Technology enhances insurance companies to handle a lot of data at a go and in real time. Such data requires a safe way of transferring it between various stakeholders, branches, customers, and organizations. Regarding this, Blockchain technology becomes relevant. It helps secure data transfer from one interface or stakeholder to another without compromising their integrity.
Data get exchanged fast and safely between the identity, claim, fraud, and other management. The data transferred is also reliable and reaches the concerned parties at a reasonable cost. Other benefits derived from Blockchain in policy management are smart contracts and Decentralized Autonomous Organizations (DAOs).
Over 38 reinsurance and insurance providers have initiated a B3i campaign designed to explore the benefits of applying Blockchain in insurance.
Conclusion
With the above trends, it’s clear that technology has impacted the insurance industry in a big and positive way. The industry’s worth has accelerated and will continue to do so with the application of innovations. It is essential for the insurance industries to know what the market wants and use the current trends to meet its needs. All insurers should embrace technology and keep updating their knowledge and devices for better gains.