Historically perceived as resistant to change, the insurance industry has been criticised for its cumbersome and time-consuming processes. However, the emergence of InsurTech marks a pivotal transformation within the industry.
At its core, insurance offers peace of mind — protection against life’s uncertainties like floods and accidents. In exchange, policyholders pay premiums regularly.
In recent years, InsurTech has experienced significant growth and gained popularity among financial customers. The global insurtech market soared to $5.45 billion in 2022 and is expected to expand by 52.7% from 2023 to 2030.
Its popularity is justified by its benefits that can provide a better customer experience. It offers digital solutions to streamline processes such as filing claims and managing policies.
Streamlining insurance access and policy management
InsurTech offers great benefits for customers. It allows them to access products directly through digital platforms and choose a relatively affordable insurance package online.
The digital platforms used in InsurTech also simplify policy management for customers. These platforms consolidate multiple policies into one accessible location, allowing customers to view, update, and renew policies effortlessly.
Furthermore, integration with fintech components through e-commerce platforms can give customers additional benefits like bundled discounts or simplified payment options.
The automated renewal reminders help customers make timely renewals and avoid the risk of coverage gaps. The platform also makes it possible for real-time access to policy documents, which is very convenient in urgent situations like accidents.
Leveraging AI in InsurTech
InsurTech also uses AI and data analysis technology to understand customer needs and offer more personalised policies. Insurance companies in the past struggled to accurately assess customers’ risks and preferences due to their reliance on historical data and basic demographics.
However, AI algorithms offer a more efficient way to do the task. With AI, insurers can do the assessment efficiently and offer customised policies with appropriate coverage and pricing. This is possible due to AI’s capability to analyse extensive data from diverse sources like social media, IoT devices, and public records.
The AI tech can detect anomalous patterns that indicate fraudulent activities. As fraudulent claims are a big concern for insurance providers, this feature can help detect and prevent scams.
InsurTech also simplifies and speeds up the claims process by assisting customers and streamlining it. Customers can now submit claims digitally instead of the time-consuming manual process.
Advanced optical character recognition (OCR) and natural language processing (NLP) technologies used by InsurTech can help extract relevant data from claim documents automatically. Meanwhile, AI algorithms can analyse claim data to assess its validity.
For further customer service, the use of chatbots and virtual assistance has more benefits than traditional customer service support. The automated customer service can be available at any time and is capable of providing support outside business hours. Customers can get instant responses as these virtual assistants can handle multiple queries without delays.
Future trends
AI technology is a pervasive trend across the fintech landscape and predicted to grow even bigger in the future. More products that people use daily will integrate AI tech into their systems.
One of the main uses of AI in InsurTech is the customer service bots. While current AI-powered chatbots can handle complex queries, automated customer service features still have limitations.
Nevertheless, there will be a greater focus on enhancing customer engagement through interactive tools in the future. The improved AI tool is expected to understand natural language, interpret intent, and provide updated relevant information or escalate issues to human assistants when necessary.
The improved use of AI is not only limited to customer service but also other areas such as marketing, personalisation and fraud detection. For instance, AI tech can help insurers to target customers more efficiently by identifying behavioural patterns.
The rising concern on environmental and social issues makes it possible for more sustainable and socially aware digital insurance products in the future. For example, products that incentivise sustainable behaviours or provide coverage for climate-related risks. With this, the customers will feel an added sense of satisfaction with their purchase.
- InsurTech
