Today the topic is not exactly about business, it is about “uncertainty”, it is about the insurance industry & it needs your attention- but why are we talking about this?
Well, Uncertainty is a part of business and what helps us in that phase is “business insurance”. Everyone is aware and a majority of businesses have one with them, but insurance is a type of business industry as well and what changes they have certainly affects your business.
So as a part of the business industry, you should have an overview of the factors affecting your business activities and today this article will cover one of those aspects that is “insurance industry trends’ ‘ where is the insurance industry going in 2022?
Let’s dig deep-
Why is business insurance important post covid?
It was so important even before but now insurance is one of the top priorities and that’s fair, but post covid it has something even more, not gonna bore you with some basic importance
Post covid insurance has become a law like a factor-
- Contracts May Require Business Insurance-Legal consideration, Loan agreements, partnership for projects, insurance is one of the factors that close contracts, and if your business is more based on contracts, post-covid the requirement to have a deal with an “insured business” is going to be on the checklist of many clients.
- Helps in Recruit and Retain Employees- Post covid this is something just below the payout and in some cases equally preferred, every individual is looking for a job with a sense of job security and other benefits like health & worker’s compensation insurance so, being an insured employer puts you in a better place to acquire and retain productive staff.
Insurance industry trends 2022:
As a business owner or manager one definitely does not need to understand everything the insurance industry is going through, but what eventually will affect your experience in 2022, we are going to discuss right away-
Insurtech is a broad category of constantly changing technologies used in the insurance industry. To better understand this we will have to look back at how previously the insurance industry has cooperated/adapted technology in the working.
Insurance and technology relationship
If we see from the 1990s that technology and insurance are like fire and water they don’t go along together, don’t get me wrong things do change with time, but the adaptation was ridiculously slow. (which was expected). why?
Because technology and insurance worked as independent bodies of the same firm,- technology was used to improve basic staff’s operations and the operations like underwriting, claims, and marketing (the main performers)—were the principal solely driven by human resources or with less intervention of technology in it,
Many speculations, surveys were pointing that there will be changes “insuretech” is going to play a major role, but what held it back is non-urgency of sudden changes in the (main performers) of the insurance industry. But it’s not the case now_
Impact of covid and new entrepreneur mindset: New entrepreneurs in the insurance industry are changing the way insurance is carried out, and there is a force that helped them to further expand their approach- “the covid-19”.
creating a new business model that uses technology to cut costs, improve products, and improve the client’s experience,
NOW LET’S LOOK AT SOME PROMISING INSURETECH TECHNOLOGY expected in 2022-
1. Artificial Intelligence (AI)- now you are looking at this as a consumer, So how will the insurance industry use (AI)? Well, the answer is no rocket science, AI will sort through and analyze all the “big data,”
Observe closely, AI is mostly used to provide those unique experiences that meet with the liking of the consumers. The key is to use the capabilities of AI to leverage massive amounts of consumer data available to create personalized experiences.
In addition, the insurer will also be able to cut costs and improve the underwriting process. The use of AI also enables them to access data faster, more accurately than a human and the cost are significantly lower as compared to employing.
- TELEMATICS: vehicle tracking devices, which are capable of monitoring location, speed, idling time, braking, vehicle faults, and more.
- CHATBOTS: Utilizing AI, chatbots can interact with customers seamlessly, saving time and by 2025 95% of initial interaction will be powered by chatbots.
- INTERNET OF THINGS: A collection of data with the help of devices like wearables, sensors in household appliances, telematics etc. “for claim prospective“ IOT automated loss notification based on sensor data, “for underwriting and actuaries“ IoT provides rich and accurate data that helps in deciding price risk. “For marketing executives“, IoT brings opportunities for unprecedented insights into customer behaviour.
2. MACHINE LEARNING- Technically machine learning is a part of AI, the concept runs on truly intelligent models that can learn from experience and improve performance without constant supervision from humans.
Adopting this emerging trend is essential as an SMA survey states 66% of P&C insurance companies think ML has the impactable potential in the industry.
To make it easy for you as a consumer what will eventually be corrected/improved will be-
1. Intelligent Document Processing- credit history, claim settlement paperwork, contracts these documents are distinguished from each other and to process each and collect the needed information it takes plenty to go through itself.
ML here can be programmed to extract only needed information by using filters such as date, time, amount, transaction history etc. it can easily extract data from complex forms as well. As so result, lower errors, cost & time saving better customer experience.
2. CLAIMS PROCESSING- For customers, what it all comes down to when dealing with insurance is how smoothly the claims settlement process goes. That is the reason you will become a client in the first place.
Here ML with the help of data from (IoT) can categorize which claims ought to be prioritized for settlement, with various factors it also helps in the early detection of illegitimate claims thus helping legitimate ones to be settled faster, (ultimately quick settlements).
3. UNDERWRITING AUTOMATION- “determining the risk and then offering coverage” the underwriter has to look after various factors like lifestyle, medical records, income resources, past claim, credit history to issue a suitable policy.
Here as well, with the help of IoT the precious & accurate data that is needed for underwriting is collected, then ML algorithms can read and combine insights available from IOT devices to generate an optimal policy price that is in line with each unique customer.
Artificial Intelligence is a bigger concept but “machine learning is the heart of the AI”. To be more specific AI can be divided into two functionalities one is “gathering of relevant data” with the help of technology like IoT devices, chatbots, wearables, telematics, mobile apps etc.
The second functionality is of course processing the collected data, this is where the heart of AI takeover -machine learning. The intelligent algorithm in accordance with firms can read and extract the relevant data in no time & with more accuracy than manual methods.
3. Blockchain Data- A blockchain is a decentralized database that stores data in encrypted blocks that are chained together via cryptography As new data comes in, it is entered into a fresh block. Once the block is filled with data, it is chained onto the previous block.- this is the basic definition.
Blockchain is mostly used to store the ledger of transactions. every business records transaction and the transparency, security, real-time update and accuracy has always been the priority even today industries are searching for more reliable resources and the BLOCKCHAIN has the potential to be the one:
- ENTERPRISE BLOCK-CHAINS ARE FAST– blockchain works on the approval of networks/computers involved in the chain. In public blockchain validation of transactions takes time as participants are unknown and are higher in number. Private enterprise blockchains don’t suffer from this limitation, since all participants are known and trusted.
- Decentralization- the “blockchain” of data is copied and spread across a network of computers by doing so it doesn’t depend on one central database which makes it impossible to hack.
- Secure Transactions– Once a transaction is recorded, its authenticity must be verified by the blockchain network. Only After all the computers in the network have validated the transaction, then only it is added to the blockchain block.
Well, Technology is taking over the insurance sector with promising changes and that will indirectly help business services as well as individuals to have a better experience, I have covered some of the technology concepts that will eventually help you understand how they are going to improve their services. You can always check more about the business and strategies here. until next time😉.