The insurance industry is changing, and it’s changing fast. The use of technology has been accelerating for decades, but it’s only recently that the sector has seen some major shifts in how insurance companies operate. Here are key trends that are transforming the industry today:
Predictive analytics is a method of using data to predict future events. This can be done through algorithms and machine learning, which are two popular ways of implementing predictive analytics.
Predictive analytics helps insurance companies anticipate customer needs and preferences, allowing them to better serve their customers. Examples include personalizing pricing, adjusting premiums based on individual risk factors like age or driving history, or sending reminders when it’s time for a yearly checkup with your doctor.
Artificial Intelligence (AI)
AI is a computer system that mimics human intelligence. It can be used to automate tasks that are currently performed by humans, such as insurance claims processing or customer support.
In the insurance industry, AI has been around for quite some time, particularly in underwriting and risk management. It’s used to predict risk and make decisions about whether an applicant should be approved for coverage or not. The more relevant information you have on your customer, the better off you’ll be at making these decisions based on data rather than gut feelings or hunches.
Machine Learning (ML)
Machine learning is a type of AI that allows computers to learn without being programmed. This can be used to predict risk and make better decisions, automate underwriting and improve customer service.
ML can also be used for fraud detection by identifying human behaviours that are unusual and flagging them for further investigation by the company’s fraud team.
Internet of Things (IoT)
The Internet of Things (IoT) is the network of physical devices, vehicles, buildings and other items embedded with electronics, software, sensors, and connectivity which enables these objects to collect and exchange data. IoT allows objects to be sensed or controlled remotely across existing network infrastructure such as the Internet via specialized software applications. Each thing is uniquely identifiable through its embedded computing system but can interoperate within the existing Internet infrastructure.
In simple terms – anything connected through a digital interface can be considered part of an IoT system. This includes devices such as thermostats or home appliances like washers and dryers that can report their status back to their manufacturer; automobiles that send information about where they’ve been driven; medical devices such as pacemakers that monitor heartbeats; drones used in environmental monitoring efforts; even traffic lights!
Telematics, the collection and analysis of data from a vehicle’s onboard computer system, is revolutionising insurance. The technology can be used to find out how fast you’re driving or if you are braking too hard. It can also determine whether someone is actually at the wheel or not. Telematics is also used for fleet management and ride-sharing services such as Uber and Lyft.
Big data is a collection of data that can be analyzed and used to predict trends. By using big data, you can predict the likelihood of certain events occurring in the future. This allows you to make better decisions about where to invest your resources, what products or services should be offered, and how much money should be spent on marketing.
Big data can affect the insurance industry in several ways:
Companies use it for risk assessment. Companies use big data algorithms to analyze records such as past medical history and determine how likely someone might be to file a claim in the future based on these past events. They’ll also use other information like weather conditions or location when deciding whether or not an applicant will get approved for coverage.
Big Data helps companies identify potential risk factors before they become actual problems. It allows insurers access to any type of customer group they want at any time with unlimited demographics available 24/7 via mobile devices. Using Big Data has become increasingly important because there’s more competition than ever before between insurers trying desperately not only survive but thrive against competitors who are coming up with innovative new ideas every day.”
Chatbots – Conversational AI
Chatbots are computer programs designed to simulate conversation with human users, primarily over the internet. These conversational agents may serve in a variety of roles such as customer service representatives or personal assistants. Chatbots can be used to answer customers’ questions or provide technical support. A few insurance companies have already started using chatbots for various purposes including answering basic questions about insurance policies and helping in the claims process.
Drones are like flying robots that can be programmed to capture aerial photos and videos. They can be used to assess damage from natural disasters: for example, they can fly over flooded areas using infrared imagery to identify where there’s standing water and where electricity should be restored first.
Drones can also help assess damage after fires, floods, earthquakes and other events that might cause structural damage. They’re being used in agriculture as well as spraying crops with pesticides thus saving farmers money on labour), managing farmlands more effectively by capturing data about soil fertility levels or crop growth rates, etc.
These are the technologies that are changing insurance today. You don’t have to be an insurance expert to realise the way we buy, sell and use insurance products is changing. The days of turning to a local insurance agent on main street are coming to an end as more people turn online in search of coverage – and they’re bringing their smartphones with them. Here are the technologies that are transforming the industry today:
So what are your thoughts? Are any of these technologies something that could be applied to your business? If so, then why not start looking into their potential impacts today? We hope that this blog has given you some insight into how insurance companies are using technology in their day-to-day operations. If you liked what we shared here and want more information on how AI can help your business grow then contact us today!