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Top 5 Technology Trends In Insurance Sector

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Insurers have been catching up to adopt new technologies compared with their retail or banking counterparts, but we observe that the industry is moving away from this approach to embrace a transformation journey. Interesting news is that some players have already started strategic investments in Big Data and analytics to stay relevant in the market and remain competitive. Others are taking the cautious first steps. Business-change leaders in the insurance industry are currently trying to optimize the running costs of legacy systems to fund digital initiatives.

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Top 5 Technology Trends In Insurance Sector

  1. 1. Top 5 Technology Trends In Insurance Sector
  2. 2. The insurance industry is facing significant disruption by Startups who are challenging the traditional business models or due to Increase in customer demand for anytime, anywhere, seamless insurance buying and service experience. Most of the trends in the insurance industry are now either technology driven or have technology as the driver. Majority of these trends will shape up in next few years and has less market penetration at the moment. Insurers have been catching up to adopt new technologies compared with their retail or banking counterparts, but we observe that the industry is moving away from this approach to embrace a transformation journey. Interesting news is that some players have already started strategic investments in Big Data and analytics to stay relevant in the market and remain competitive. Others are taking the cautious first steps. Business-change leaders in the insurance industry are currently trying to optimize the running costs of legacy systems to fund digital initiatives. Introduction
  3. 3. Trend – 1 : Economy of Big Data and Analytics Big data includes traditional or structured business sources of structured data, such as the millions of daily transactional records from retail, financial, manufacturing, or transportation/logistics industries and now there’s also non–traditional or unstructured data that might come from social media sources like Facebooks, Twitter, Youtube channels, Emails, Text messages, Voice calls , images , files etc Hence big Data helps insurance companies to identify and report data at much faster and effective way. Claim assessment can be auto-routed depending on complexity and frauds/Defaults can be minimized using predictive analysis. Subrogation and Settlement process can be more effective and efficient due to availability huge amount of data. Hence the new models needs to be built more pro-actively and insurance companies needs to invest in Human resources (data scientist) and technology (Hadoop, Spark etc) which can help them be ahead of competition and more relevant in the industry.
  4. 4. Trend- 2 : IOT With Connected Devices and Apps Due to revolutionary reduction in cost of sensors, improvements in communication methods and increased power in data processing, Insurance companies are leveraging concepts of IOT for various industries like Home automation, Health and Auto insurance to understand the customer’s needs and risk. The vision of the Internet of Things (IoT) is to connect devices and daily consumer objects, enable information gathering and management of these devices to increase efficiency, new services or achieve other health, safety or environmental benefits. The IoT is also a relevant field for many other trends e. g. Smart Home, Healthcare and Fitness Tracking (quantified self) – and the Industrial Internet of Things (Smart Factory, “Industry 4.0”).
  5. 5. Some uses cases in which IOT can help insurance companies. a) Understanding the health risk of customers accurately using the health apps and wearable. b) IOT can reduce the turn-around time for claim settlement by knowing the exact location and circumstance resulting in claim. c) Predictive data analysis can give advance warning signals resulting in reduction in frequency or severity of claim.
  6. 6. Trend-3 : Movement Towards Personalized Insurance in Sectors like Automobile and Health. The concept of personalized insurance is gaining grounds with availability of Big Data from connected devices. Rapid growth in Smartphone capabilities, connected cars with built in embedded telemetric devices, smart watches and mhealth apps is helping companies offer more personalized insurance. PHYD – Pay how you drive is a method in which premiums are charged after assessing the driving of customers. This helps in not pooling the responsible driver with habitual rough drivers who have more probability of accidents and hence is expected to pay higher premium.
  7. 7. Concept of customer profiling will open up interesting opportunities and insurance companies can partner with car manufactures, electronics and consumer goods manufacturer to drive more customer centric data which can help them make personalized offering to customers.
  8. 8. Trend-4 : Artificial intelligence & Autonomous Agents What Can Banks Do With Data Analytics? Essentially, machine learning refers to a set of algorithms that use historical data to predict current or future outcomes. In insurance sector, we see AI as a fundamental game-changer since most insurance companies today are focused on three main objectives: Improving compliance: Today’s machine learning algorithms, techniques and technologies can be used to review, analyze and assess information in pictures, videos and voice conversations. One immediate benefit, for example, is the ability to better monitor and understand interactions between customers and sales agents in order to improve controls over mis-selling of products. Improving cost structures: With a significant portion of an insurer’s cost structure devoted to human resources, any shift towards automation should deliver significant cost savings. Using machine learning insurers could cut their claims processing time down from a number of months to just a matter of minutes.
  9. 9. Improving competitiveness: While reduced cost structures and improved efficiency can lead to competitive advantage, there are many other ways that machine learning can give insurers the competitive edge, including product, service and process innovation. Autonomous smart agents or virtual personal assistants (VPAs) are on the rise and are becoming a more sophisticated technology, enhanced through (advanced) machine based learning. VPAs such as Apple’s Siri or Google Now are part of the ambient user experience, instead of interacting with buttons and menus users can speak to a smart app, which is an intelligent agent. The trend is now moving towards corporate sector with IBM Watson and Salesforce Einsten we will see wave of POC in setting up Autonomous Agents in Insurance sector.
  10. 10. Trend-5:Cyber Insurance Data breaches and cyber-attacks are now a fact of life together with taxes and death, resulting in demand for cyber insurance. It is expected that cyber insurance will become a default choice for many companies. Large companies have all necessary investment to prevent cyber threats or loss due to data breach, however it is impossible eliminate cyber risk and hence secondary option is to take cyber insurance. The main problem is quantifying losses from attacks, because they are often intangible — lost sales or damage to a brand name, like the public relations disaster Target suffered after the breach of its point-of-sale systems late last year. At the same time, underwriters lack the data they need to figure out how likely it is that an attack will occur, or what it will cost. This is because most breaches go unnoticed or are never publicly reported. Information on past attacks is not particularly helpful because attackers are always getting more advanced, and the risk is increasing as companies put their most valuable data online.
  11. 11. Cyber insurance has existed since the 1990s, but companies were forced to consider coverage when a New York court ruled that Sony’s general liability policy would not cover the $2 billion in costs the company incurred from the huge data breach in 2011 involving the online network for its PlayStation game console. We feel cyber insurance will have huge impact in entire value chain of insurance company. Insurance companies will have to build models around the same and work with local authority to design products looking at available historical data. We will see more holistic approach, where insurance companies will share data among each out to drive better analysis in risk exposure and building futuristic products for corporate customers.
  12. 12. TeqForce offers a revolutionary new approach to business intelligence that allows you to quickly connect, visualize and share your data with a seamless experience from the PC to the iPad. United States Office 42-15 34th Ave. Suite 3J, Long Island City, New York 11101 United Kingdom 170A , Horsendane Lane, Greenford, LONDON UB68AE Global Delivery Center Level 6, PENTAGON P-2, MAGARPATTA CITY, PUNE – 411028. Contact Us: Locate Us: Email us: sales@teqforcesolutions.com LinkedIn: https://www.linkedin.com/company/ teqforce-solutions-pvt.-ltd Twitter: @teqforce US: +1.347.352.0154 UK: +44.74.3846.5647 Call Us:Web: http://teqforcesolutions.com/

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