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Uzone.id – Insurtech is not simply the hybridization of insurance and technology but rather the employment of technological avant-garde as a crucial driving force in transforming insurance providers into more efficient organizations.
By embracing new technology and products, insurance companies can unlock a transformative opportunity. Optimized businesses, reduced costs, and soaring customer satisfaction – the future of insurance is within reach.
It is the way through which insurance companies can offer the best possible service of the product and be able to motivate the insurer to change their idea of it as well to create a market through the latest technologies to solve the problems of the buyers.
“Insurance is a data-driven business, so it will benefit greatly from gen AI, which can simplify our work. We’ve been working with other forms of AI for over 20 years, and the latest iteration with gen AI has opened up a new world of possibilities,” said the CEO of Allianz Technology, Barbara Karuth-Zelle.
From robotics and chatbots to innovative business models, let’s see how Insurtech is changing the insurance world and you as a customer.
How Insurtech works
The insurance policy is an agreement between the insurance company and the insured party (policyholder). The insurance companies will ensure that there are government funds for those kinds of events that will cause immediate reactions, such as floods, car accidents, or even death.
On the other hand, the policyholder pays a lower premium for the insurance, and many times this payment is made either monthly or annually in exchange for future protection even if it is not given at that time.
Insurtech needs technological advancement to be a feasible model of so-called fintech, a colloquial term for the innovative technology that reshapes the financial services industry.
The decrease in costs and the improvement in efficiency are two common results of technological evolution. For instance, twenty-two years from now, different banking options are fintech, which is the use of technology in the financial sector, which seems to be a leading trend.
New Adherence in the market might come from the ways humans and machines work together, for example, AI might engage in billions of bank accounts as well as thousands or billions of people’s purchase transactions if it is the first and only option for them as the customer personal data is left to the tech companies.
Insurtech’s goal is to do the same to insurance, making it more convenient and fast for businesses and customers alike.
With the rapid shift to the online digital environment, consumers are now comfortable with sharing financial data and doing transactions on the Internet.
They are more educated about their insurance options and therefore assume that they will be able to make their choices using a simple and reliable online comparison service (we encourage policyholders to conduct thorough research and review their policies every six months.
Moreover, the insurance companies also have certain advantages in their partnerships with Insurtech startups. According to the report, the process of digitalization of existing businesses might result in the profits of large companies being doubled in five years.
In the same way that fintech is doing, smart insurance companies are aiming to collaborate with Insurtech while providing advanced insurance business insurance products for them to sell.
How is Insurtech affecting the insurance business? Some main insurance options such as IoT, machine learning, and generative AI can be implemented for the company.
Internet of Things (IoT)
Internet of Things stands for the network of internet-connected devices which can transmit, collect, and share data. This can refer to wearable devices, and smart homes however non-human agents also use those devices to monitor themselves and telematics devices that are installed in cars.
This allows them to cut the insurance cost as they can share with the insurance company their real-time driving data.
The usage of connected devices in insurance is helping in the better understanding of risks and thereby changing the face of insurance.
The illustration can be described like this: “Drones are designed to access remote locations easily and search through the databases of the company. The drones can also accomplish high-end aerial imagery analysis that will give the insurance companies a clearer view of the affected area without the need for their physical presence.”
The insurance vendors will profit from the expanded data set to give a better customer experience with policy customization, personal service, and faster claim management.
Machine Learning
Of course, Secondly, loads of information can be accessed, but it is useless unless it is utilized well by the company. This is where business comes in machine learning, which works hand in hand with the software to analyze trends and provide insights on customers and potential risks.
For instance, machine learning can help:
- Claims processing, To be clearer about the situation and to give the provider an advantage as to what the insured did wrong or right, vehicle data can analyze statistics like sharp turns or aggressive braking. Telematics, for instance, was a breakthrough in the use of big data to produce more accurate insurance policies. As a result of the improved technique of understanding driver behavior, auto insurers can speed up the processing of claims and handle them more efficiently.
- Risk modeling, In the chain, before, and also after, insurance companies had to obtain a risk assessment based on the information that the policyholder and the vehicle had. To explain that thanks to machine learning, personalized detailed risk profiles were created using algorithms. If a driver often speeds then this will be included in the company’s risk model.
- Underwriting. Insurance companies have different ways to use and apply their underwriting systems, for example, they can outsource it to computers and thus, this technology assists them to become offering faster customer service or special features to policyholders.
- Detect fraud. Companies such as Shift Technology apply machine learning algorithms to filter out fraud insurance claims from data sets, which makes it easier for their own data sets to be processed.
Artificial intelligence
AI, in particular generative AI, extends far beyond predictive analysis, and thus, it is currently at its peak of success in many fields, not the least of which is Travel. The fact that companies have started using AI in vehicles helps a lot.
We will have to make changes like informative cars, driverless cars, and ride-sharing applications in addition to current technologies to open up the possibilities Insurtech offers for such a future.
Such as auto insurance firm State Farm’s Drive Safe & Save which uses AI to analyze in-car camera footage and give feedback on any unsafe actions. Don’t want to wait to text until you get home? You’ll find out if you count on the car, and your insurance will be affected.
Insurtech companies using AI can come up with several things like:
- Fraud prevention: It marks questionable behavior so that a licensed agent can give it a closer look.
- Customized products: Introduce products to clients when they are needed.
- Smarter claims processing: The claims submission process gets more accessible
- Risk reduction: Data is operating and accelerating insurance
Why is Insurtech important?
Put plainly, Insurtech is a method that improves customers’ experience from new perspectives. To be more specific, insured people were in the past faced with salesmen who were solely concerned about making a sale to benefit themselves.
Moreover, there is an overabundance of record-keeping to tend to, and the whole shebang can last for weeks, or even months. The shape of things is such that the landscape of insurance and financial services is now being leveled and people from all walks of life now find it more accessible.
Policyholders can now also find out more about different insurance options and buy insurance online. The internet and apps are the tools that people use to compare and find the most suitable one for them. No need for multiple forms, insurance professionals, or stepping foot into a brick-and-mortar business.
Moreover, the rasping factor for valuation is starting to concern people with more than money.
Using solutions like IoT, AI, and machine learning companies can additionally break the drivers into different segments based on actual driving habits instead of speaking generally about them.
This means this could lead to lower premiums or at least premiums that are a better reflection of you as an individual. This also applies to home and life insurance as well.
Besides, the insurance cost goes down for both the company and the policyholder. This is general insurance for traditional insurance, but we think we will see more “short-term” insurance plans.
For instance, the cover cost for a two-day weekend trip to a city three hours away should be more than a month-long trip to an Australian volcano.
In the same way, the situation may be such that if you do not have insurance and are only in need of a car to pick up some items from a friend’s place, it would be unwise to invest in a six-month package; you need to insure for only one or two hours. Insurtech creates the flexibility of a classically rigid industry.
