Top 5 Technology trends in the Insurance industry
The insurance industry is currently experiencing a wave of transformative technological trends that are reshaping the way insurers operate and engage with customers. These trends are not only a response to changing customer needs but also driven by the need for innovation and efficiency.
One of these trends is the deteriorating level of trust in insurers, as revealed by the Edelman Trust Barometer 2022, with only 54% of people express confidence in the financial services sector. We’re also talking about the galloping evolution of customer needs. Today, policyholders are no longer looking just for financial protection, but for customized solutions to meet their daily needs.
In this article, we delve into the top five digital trends that are revolutionizing the insurance sector.
1. Blockchain Revolutionizes Insurance
Blockchain technology is making a significant impact across industries, including insurance. It enhances transparency and security by securely storing insurance contracts, policy information, claims, and settlements. According to Absolute Markets Insights, this technology is predicted to grow by more than 65.9% between 2021 and 2030.
Blockchain’s influence extends to verifying the identities of beneficiarie and issuers, reducing the risk of errors, fraud, and identity theft. It facilitates data sharing between insurers and even allows customers to make real-time policy changes. This innovation empowers customers and improves the overall insurance experience.
2- Artificial intelligence (AI) Integration
The integration of artificial intelligence (AI) is reshaping insurance processes, with predictions that 10% to 55% of these processes will be automated by 2030/2040.
AI’s application ranges from accurate claims estimation and fraud detection to predicting risks and providing personalized customer services. This enables insurers to better understand customer needs, offer competitive rates, and streamline underwriting.
The transformation brought by AI affects every step of the insurance value chain. Insurers are shifting from a reactive approach (Detect and repair) to a predictive one, enhancing productivity, decision-making, and customer experience.
3- Internet of Things (IoT) and Connected devices
The Internet of Things (IoT) is empowering insurers to gain deeper insights into risks and design tailored insurance products. The global insurance IoT market is projected to grow from $8 billion in 2019 to over $300 billion by 2027. Connected devices such as wearables and smart devices are becoming integral to insurers’ strategies.
Connected devices enhance operational efficiency, simplify insurance payments, and provide valuable data from policyholders. This trend encourages insurers to adopt IoT devices, creating opportunities for innovative services and enhanced customer engagement.
4- Intelligent Chatbots to enhance Customer interaction
Intelligent chatbots are playing a pivotal role in improving customer interactions by providing real-time assistance 24/7. According to Servion Global Solution, approximately 95% of customer interactions will be carried out via virtual assistants by 2025, and 64% of users appreciate the 24/7 availability of bots and prefer to communicate with a bot over a human.
How are chatbots changing the insurance industry?
Chatbots streamline communication and enable insurers to provide personalized services to a larger audience. Their availability round the clock ensures customers receive prompt and accurate responses, enhancing overall satisfaction.
5- Leveraging Predictive analysis
The insurance industry is leveraging predictive analytics to analyze trends, predict customer behavior, assess risk, and detect fraud. Companies that utilize predictive analytics experience notable improvements in their claims ratios. Predictive analytics facilitates quick and accurate risk assessment, enhances customer identification, automates tasks, reduces costs, and offers tailored products.
According to a study conducted in 2018 by Valen Analytics, companies that use predictive analytics see a 3% to 9% improvement in their claims ratios, compared with those that don’t use these methods.
How is predictive analytics changing the insurance industry?
- Quick and reliable evaluation of customer risk and fraud risk.
- Improved identification of « customer value »
- Automation of certain tasks
- Reduce costs (management, fraud, etc.)
- Offer customized and attractive products according to customer profiles
Predictive analytics transforms insurers’ capabilities, allowing them to focus on personalized customer relations and managing complex scenarios. This technology reshapes the insurer’s role, enhancing their expertise and strategic decision-making.
Enabling the Future of Insurance with ADDINN Group
The insurance industry is at a turning point, and embracing these transformative technology trends can lead to increased efficiency, enhanced risk management, and improved customer satisfaction.
ADDINN Group is equipped to guide insurance companies in integrating these technologies effectively, ensuring seamless digital transformation. (e.g. Claims management platform, customized ERP for managing insurance products, etc.).
Are you an insurance company seeking to stay ahead in the digital age?
