Technology is changing quite fast and continually bringing a new face to every area of business. New trends are the talk of the day everywhere and include the insurance industry. The more the technology evolves, the more the stakeholders embrace and adopt it. It is about syncing with every development. Consumers change in the way they use insurance and insurers change their business models.
2019 is the year expected to record digital maturity in the insurance sector. This digital transformation brings the highest business opportunity for insurers. Thus, company owners should see to surpassing revenue and achieving high business growth.
With so much change, company leaders are fighting to see that their businesses remain competitive. As Jason Silva quote goes: Technology is, of course, a double-edged sword. It can trim as well as destroy. It depends on your reaction to technological changes. Therefore, many business owners want to be in front and not sidelined by technology. Here are the key insurance trends that will dominate the year 2019.
1. Emergence of premiums based on Individual Customer’s risk
Insurance premiums based on individual risk are something which is not new. Nevertheless, the year 2019 will see an increase in the accuracy and efficiency of the risk-calculating algorithm. Insurance companies should seek to improve the accuracy of risk-prediction by embracing real-time data sources.
The technology brings on board the ability to use science and machine learning algorithm to assess data. Thus, you can know what high-risk factors are and which behavioral cues can lead to an adverse event. Such predictions can improve individual risk assessments and help derive suitable premiums.
It is a development that customers will profoundly embrace and appreciate. Today’s customers have more complex needs as well as knowledgeable about their choices than ever before. Thus, anything that meets their expectation is more than welcome. Anything like a change from ‘one-size-fits-all’ product to usage-based or on-demand insurance products will be something to go by.
As customers become more sensitive of their needs, it puts a challenge on the insurers. Without reacting swiftly to these changes, they may lose their market share to tech-giants. This observation is valid because these companies already have the facilities. They have immense data pools, specialized in data analytics thus can easily penetrate the market.
2. Integration of Artificial Intelligence (AI) within Insurance
AI is quite promising in the insurance market. You should expect to see an increased machine force in every routine task. Chatbots will be used as automated insurance agents for more personalized customer services. There will be AI usage in analyzing user profiles to determine communication strategy and other things. This will help in the customization of insurance services.
AI will significantly bring a rise in productivity due to more accurate predictions. It will result in behavioral policy pricing whereby, IoT will provide personalized data to pricing platforms. This will enable safer drivers to pay less for Auto-insurance and people with healthier lifestyles to pay for Health-insurance.
AI will enable coverage personalization, and users may customize coverage for specific events or items. AI will result in an on-demand type of insurance. Claims settlement will also be fast and customized. There will be the usage of online interfaces and virtual claim adjusters to make it easy to settle and pay claims after a calamity. AI will also reduce the likelihood of fraud.
3. Cybersecurity
The more the advancement and improvement of technology, the more the cyber attacks get sophisticated and more apparent. Efficient service exchanges also raise frauds and cybersecurity issues. This calls the need for a proactive approach by the insurance companies.
Cybersecurity strategies lack in many organizations as 59% of them would find issues related to cyber attacks. This is according to EY findings. Instances of security have grown significantly and millions-worth data stolen. To protect clients’ data from privacy bleach firms should put more effort to ensure systems are tightly guarded. To this effect, blockchain technology is taking roots in the insurance industry.
The year 2019 will have an elaborate blockchain strategy implementation at the corporate level. There will be proactive threat monitoring and firms will also opt for cyber insurance premiums.
4. Insurtech Partnerships
The desire to go digital in every area of insurance will stimulate insurers either to acquire technology or partner with Insurtech companies. Thus with high demand for innovative products and services from the digitally affiliated generation, this collaboration is inevitable. This development will make traditional insurers to benefit from faster results in obtaining tech culture.
There will be newer models and arise of revenue streams for more profitability and operation costs will reduce significantly. There will be value added offerings and enhanced customer experiences. In the same token, the Insurtech companies will design more powerful and focused applications. They will position themselves to solve specific problems and also deliver high-quality digital experiences.
The above trends point to the conclusion that the insurance industry has a high potential to deliver exceptional results. The secret is to know how and when to tap into this potential and leverage on delivering maximumly through technology. Follow these trends to acquire a considerable edge in the market space.
Mphasis 