As more new technologies are developed, entire industries face increasing pressure to use these advances to meet ever-evolving consumer expectations and keep up with the quickening pace in their respective industries. The insurance industry is not exempt from this pressure. In fact, a recent study from Accenture reveals that the pressure itself to innovate comes from the insurers themselves. So what sort of changes can we expect to happen in the insurance industry? Here are a few possibilities:
Using Big Data and Predictive Analytics
Massive amounts of data are created exponentially. Sorting these constantly piling amounts of diverse data is a humongous task no number of people can track. Technological advances in big data and analytics can help insurance companies analyze, manage, understand data, and make forecasts that have a small margin of error. Different aspects of insurance can benefit from:
Risk assessment and management. Data analytics, specifically risk management analytics, can provide a deep insight into insurance data and provide insurance companies with better risk analysis. The appropriate recommendations can be implemented, improve the process, and enhance profitability.
Customer acquisition. With data analytics, insurance companies can better understand and analyze their customers’ behavior and find underlying patterns. They can then create customized quotes to sell products online, which can be more enticing and attract more customers and, therefore, increase profits.
Managing claims. This technology allows for predictive analytics, which can help find fraudulent claims by using text mining, rules, and database searches.
Using Machine Learning for Underwriting
Improved underwriting is one benefit insurance companies can gain from applying machine learning into their processes. Machine learning can also reduce malicious activities in payment systems and fraud in claims data. Trained ML models can also spot lapsed policies, defective billing, and create personalized offers.
Underwriting. Machine learning can expedite the underwriting process, as it can automate data collection and deliver it accurately and on time. Policyholders’ data can be accurately assessed, and the ML models can calculate policies and insurance premiums charges correctly.
Intuitive pricing. This technology can allow for predictive pricing based on new tools and techniques to assist insurance companies with the appropriate pricing and risk selection for their clients.
Artificial Intelligence (AI)
The impact of AI across industries is growing and becoming increasingly significant, even in the insurance industry. There are many variations of AI. Some of them are radically changing traditional insurance operating models. Here are a few of their possible applications in insurance:
Personalized customer experience. Chatbots that use AI can provide a customized buying experience for prospective clients. It can modify their experience based on their social and geographical data. Chatbots can also provide a quick response to client queries anytime.
Facial recognition. Similar to the facial recognition security function for smartphones, this technology can make improvements to the underwriting process. Facial recognition technology and gamification techniques can be used to scan a person’s face and detect life-threatening habits to predict their life span and calculate their premiums.
These are just a sample of the many emergent technologies that can and are already being applied to the insurance industry. You can expect many more brilliant technologies in the coming years, or even sooner, to make mind-boggling changes to the insurance industry and its practice.