The pandemic dramatically accelerated the growth, use, and acceptance of emerging technologies. The massive shift to e-commerce will continue in the coming years as consumers have become accustomed to new buying patterns. Buying patterns that are expected to be permanent.
In an April 2021 Pew Research Center survey “The Internet and the Pandemic”, over 90% of US adults said the Internet was important to them. They reported that they used technology or the Internet in new ways, and many considered that these new tools are just as good as in-person contact.
As insurers race to increase productivity, improve customer experiences, and become more agile, it is important to understand the emerging tech trends and learn how they can accelerate insurer growth potential in the decade to come.
The first, and one of the most promising trend trends – one that we all agree is not going to disappear any time soon – is cloud computing services such as SaaS (software as a service). With cloud computing services such as SaaS, insurers avoid the complexity of owning and maintaining IT infrastructure. Instead of buying the software and then having to maintain it, they simply subscribe to it. The subscription offers the opportunity to automate and digitalize core insurance operations from product creation to distribution, automated pricing and underwriting, policy issuance and claims. Tech analyst Gartner predicts that as much as half of business spending across application software, infrastructure software, business process services, and system infrastructure markets will shift to could computing by 2025.
Here are the benefits of 7 other trends now available to insurers:
Delivering Better Customer Experiences: While omnichannel distribution systems are not new, how they are being used today is new. Instead of in-person sales and marketing, omnichannel distribution systems emphasize the online experience and include digital self-service options such as online applications and one-click claims reports. According to McKinsey & Company’s “How top tech trends will transform insurance”, AI-enabled “human in the loop” experiences or ‘off ramping’ increase productivity and allow for higher-quality touchpoints with customers who want further information or need more time to fill out an application.
Automating Pricing and Underwriting Processes: With automated pricing and underwriting processes, there is no need for manual interventions. Policy-issuance processes can be mainly or entirely digital. Customers receive their policy documents through online portals, via email or through other digital communication channels, which reduces the regulatory requirements which often limit the use of emails during policy issuance.
Since the pandemic began, many insurers began embracing accelerated underwriting, supported by digital self-service tools and other insurance data and analytical technologies to populate online applications with commonly available data. Additionally, predictive analytics and machine-learning algorithms in underwriting are making it easier and faster for customers to obtain insurance coverage by skipping traditional tedious underwriting processes.
Automating Renewal Applications: Here, too, manual intervention in the renewal process is not necessary with auto-generating policy renewal packages. Quotes are automatically generated. Automated renewal applications connect with policy administration and claims systems in real time, leveraging data for re-calculations at the anniversary of a policy’s renewal. This frees up insurers to concentrate on new business and avoid manual preparation of renewal quotes and letters and worrying about tracking renewals. It is all done seamlessly and automatically.
Offering Insurance for How Customers Want to Use It: During the pandemic, many consumers became aware of the waste involved in paying for auto insurance on cars that sat unused in the garage or driveway. As the nature of work transformed, and the daily commute became a thing of the past for many, insurers began offering products more in line with the way consumers were living. Telematics devices allowed insurers to provide products based on how they drive and how much they drive. Called usage-based-insurance (UBI), rates are based on driving habits and mileage. According to market research company Allied Market Research, UBI accounted to nearly two-fifths of the North American insurance market in 2019. The study predicts UBI will reach $149.22 billion by 2027.
Shorten Speed to Market: Another important aspect of the new tech trends is the ability to free up insurance industry experts to create new products and services. The product deployment release cycles used to take somewhere between 18 and 24 months, according to Deloitte. The technology exists to help shorten the product and application development cycles right now, although it does require a major shift in how insurers think about and build insurance software.
Broaden Marketing Efforts and Increase Profits: Working with banks, car manufacturers, and other distributors, insurers can now market insurance products and services – embed insurance products - as part of a online sales process involving the online portal of the bank or auto dealer. This is a win-win for both insurers and distributors as the insurance products are sold directly on a distributor’s platform.
Open application programming interfaces (APIs) now offer access to software applications or web services. Companies connected through APIs can create an insurance technology ecosystem offering a customer experience that intertwines digital services provided by multiple companies. For example, a car dealer that uses open APIs could partner with an auto insurer to sell car insurance through the car dealer’s app. This would make it easier for customers to buy a car and insurance simultaneously.
Settle Claims Quickly and Efficiently: Utilizing the best features of human and artificial intelligence (AI), insurers now have access to digital tools — video enabled claims adjustments, geospatial imagery, drones, and AI (fraud detection) — to improve productivity and effectiveness of claims accuracy, while also improving customer experience.
Our clients’ success is our central focus.
Origami Risk is here to help you navigate the new tech trends and start the process of putting technology to work for you from improving productivity to creating better customer experiences. To learn more about how Origami can help you navigate the new tech trends available to insurers, request a demo.