The Life Insurance industry is
going through a disruption, as we see a lot of tech giants getting converging
in the Insurtech space. This is an
industry that’s witnessing a revolution in terms of the ways people think of
insurance as well as the way insurers go about gathering data and doing their
business. With the advent of technologies like IoT, Big Data analytics, AI etc. we are witness to what the
Industry giants are terming as Insurtech
2.0
Advent of such technologies will
facilitate both the customers as well as the insurers, thus changing the life
insurance products from a push to a pull driven industry. With the advent of
aggregators and apps and wearable and what not, the consumers are finding it
easier to understand and transact the life insurance products.
The following Insurtech areas are the torch bearers of
the tech revolution the life insurance is witnessing now and it will be
interesting to see how the technology landscape changes the market.
AI & Chat Bots: To provide their Customers with the best in call experience, insurers have been moving from UI to UX. AI is the latest tool that is expected to provide customer delight. AI based technologies like IBM Watson is driving chat bot based products that are providing the insurers with a new and cost effective way of connecting with their customers across the social medial landscape. Artificial Intelligence is playing a very important role in refining the customer experience via these chat bots that facilitate smart and simple humane conversations. This will also result in lowering the cost of customer service processes.
IoT/ Wearable: The new generation of customers are adapting to the wearable tech for a healthier lifestyle and are ready to share their personal data with the insurers if it results in a savings on their policy premium. Insurers will user machine learning to gain insights from these real – time data. Pricing can be more accurate and tailored basis these insights, resulting in better customer persistency ratios.
Big Data Analytics: The advent of IoT and wearable have increased the touch points of insurers with their customers, resulting in a manifold increase of data that needs to be crunched to provide the insurers with insights for better pricing, and personalized customer service. Big data analytics will allow the insurers to automate the underwriting processes up to an acceptable financial limit, reducing their turnaround times and increasing the cost efficiency of these operational processes.
Cloud based services: IaaS, PaaS and SaaS are some of the hot selling cloud technologies having a wide acceptance in the Fintech landscape. Still, we don’t see those making similar in-roads in the Insurtech landscape. There are some complications in adopting cloud based technologies due to the regulations and data confidentiality clause. Hence, the strategy has been improvised wherein companies are trying to implement a hybrid hosting model having a mix of cloud and on-premises (minimal) IT Infrastructure model. This gives them the required agility and freedom from the overhead of managing IT infra while adhering to the regulations.
Blockchain: Back office paperwork and operations has been a major headache for all the insurers since ages. Not much has been achieved here due to the stringent regulations revolving around the areas of underwriting and claims. Blockchain is disrupting this archaic working model by bringing in concepts like smart contracts and digital assets. Distributed Ledger Technology (basis of blockchain technology) means an increase in transparency in policy servicing, claims management etc. Smart databases can be created with information assets that will provide with verified data at the fingertips of the insurers, thus minimizing the risk of fraudulent claims. The data will be available in the public domain and hence, will result in an increase in data sharing among the insurers and providing with a unified customer experience.
With the convergence of so many
technologies, it will be interesting to see the insurance industry transforming
into a global technology hub and the benefits it will bring to the insurers as
well as the customers. Hope it will help in changing the mindset of the
customers and will commoditize the insurance products and become a part of life.
