The Future of Insurance – How Tech Innovations Are Changing the Game

World-leading insurers are adopting cutting-edge technology to meet customer demand for customisation and leverage new data capabilities to support strategic initiatives.

Imagine a future where underwriting as we know it no longer exists and customers purchase insurance to prevent losses rather than cover them. Information barriers are being removed while advanced analytics accelerate decision-making processes.

1. Artificial Intelligence

AI technology has quickly become a mainstay in insurers’ operations, as it allows them to automate and streamline processes while better understanding customer needs and providing tailored services.

AI’s predictive modeling abilities offer accurate risk evaluation and fairer premium pricing, and can assist in the detection of fraud by employing its sophisticated pattern recognition capability – protecting both insurers and policyholders alike.

AI can help claims departments increase processing speeds and create a more tailored experience for policyholders. For instance, smart home devices that detect leaks could alert both insurers and policyholders of possible water damage claims before it occurs – this enabling preventative operating models and saving both parties money over time.

2. Robotic Process Automation

Robotic Process Automation (RPA) uses software robots to complete repetitive and unvarying rule-based tasks more quickly and more accurately, eliminating human error and processing time while freeing staff for more complex work. RPA can help insurance companies streamline back office processes more effectively while meeting customer expectations more effectively.

At its core, AI assists underwriters by analyzing multiple data sources, accelerates claims processing with image analysis and automated data entry, delivers accurate policy pricing, meets regulatory compliance needs more easily, simplifies agent onboarding processes and transforms how businesses connect with customers.

An insurance agency using Eleviant RPA bots to automate their policy processing experienced a 53% decrease in TAT and 50% reduction in manual efforts, leading to significant cost savings that helped accelerate their ROI within months.

3. IoT

Insurance carriers can leverage IoT data to streamline claims applications, reduce costs, and increase customer retention through IoT-enabled devices and programs such as usage-based insurance plans (UBI). Furthermore, this technology facilitates new products such as UBI plans that encourage better user behavior.

Telematics in cars enable insurers to monitor driver performance and provide discounts for safe driving, while health insurers can use wearable devices that track activity levels, sleep quality and blood pressure levels to assess policyholder risk levels and offer reduced premiums based on healthy habits.

Insurers can utilize IoT sensor data to monitor buildings or infrastructure and proactively alert clients before an incident takes place, making customers feel secure while increasing customer satisfaction and loyalty. Furthermore, the technology allows predictive maintenance as well as expedited claims processing – insurers can integrate IoT data through APIs with third-party providers and analytics platforms for greater decision-making power.

4. Digital Twins

The insurance industry faces many significant challenges, including climate change-driven premium increases and geopolitical instability, which necessitate insurers embracing business agility by employing connected tools throughout their value chains.

Digital twins allow insurers to utilize accurate and dependable data points to defend against unpredictable weather events like hurricanes and wildfires that cause property damage, such as hurricanes. Monitoring, simulating, and analyzing their impact on physical structures helps mitigate risk and avoid costly reinsurance premiums.

Digital twins enable insurers to transition from transaction to assurance models by analysing data points such as ESG behavior and health indicators to assess risk profiles, streamline underwriting processes and reduce costs and time spent on site visits, information transfers and sorting through records for claims processing.

5. 3D Printing

While much research has been done into the impact of 3D printing technologies on product innovation, little is known about their effect on business model innovations. This knowledge gap is critical because as this article shows, technological revolution without adequate business model evolution can become a trap.

Insurance implications:

3D printers have begun blurring the boundaries between manufacturers and end users, creating new liability concerns. For instance, if an object printed by an individual at home using their home 3D printer proves defective and leads to injury or death for which someone could be held liable? Bruch & Weichert suggest this responsibility could extend from its maker, the material manufacturer used in printing process or operators of an internet platform offering 3D models as potential defendants.