When it comes to the insurance industry, technology – not space – is the final frontier.
Emerging technologies have the possibility to change the face of the industry – it’s likely to look completely different five or 10 years down the road. Insurers who embrace new technology position themselves as leaders of the pack.
Instead of playing catch-up to the changing industry, consider staying ahead of the trend with these three emerging technologies.
1. Artificial Intelligence
Seventy-five percent of insurance executives believe AI will transform the insurance industry in the next three years, according to Accenture’s Technology Vision for Insurance 2017 report. How? Here are a few ways.
• Automate claims management process – Currently, the claims process requires many hours of manual processing. Using AI to automate the process could increase accuracy, reduce the time it takes for customers to get claim checks and allow employees to focus on higher-value tasks.
• Improve fraud detection – By spotting anomalies and patterns in data, AI could help insurance companies flag claims for possible fraud that would be difficult for humans to detect.
• Increase accuracy of risk assessment – Risk assessment is based on predicting the future, but humans are only human – only able to analyze a limited amount of data and prone to biases when making decisions. By processing large volumes of data, AI could more accurately predict what’s likely to happen and dramatically improve the accuracy of risk assessments.
2. Internet of Things (IoT)
The IoT insurance market is expected to be worth $42.8 billion by 2020, according to Markets and Markets. Insurance decisions – claims, underwriting and risk assessment – could only be made with the data insurers have available. IoT sensor devices could help insurers dramatically increase both the quantity and the quality of their data.
• Access real-time data – Instead of relying on historical data, insurers could use real-time information to make more accurate insurance decisions. For example, wearables could transmit data from employees collecting payments from workers’ comp disability claims to ensure they are complying with rehabilitation requirements.
• Collect data previously inaccessible – Sensors that collect data, such as speed, temperatures and weight, give insurers access to data that wasn’t available previously. For example, insurers are now using IoT to collect metrics, such as speed and braking, in order to price car insurance premiums.
• Increase customer safety – Many IoT devices, such as video doorbells and connected smoke alarms, help customers stay safer. By offering discounts for using smart home devices, insurers could help reduce their own risk.
This technology is a distributed ledger that uses shared databases and allows information to be spread geographically. Blockchain has recently gained buzz, but in reality will take years to deploy since entities that use it must first agree on terms of interaction.
• Increase transparency in underwriting and claims process – Insurers could use the Blockchain ledger to increase transparency, leading to higher levels of trust. For example, Harvard Business Review suggests using a Blockchain-based public ledger to help families claim previously unclaimed life insurance policies.
• De-centralize databases – Many insurance databases contain redundant, repeated information. Blockchain allows each party to maintain control of their own while offering a way to exchange needed information that isn’t document oriented.
• Provide self-service options – Blockchain opens up new payment options, offering customers more self-service channels. This is especially helpful for situations with multiple layers.
At Argo, technology and insurance work hand in hand every day. See how Argo Digital is driving advances in data science, AI and insurance technology