In the digital era of innovative products and services, insurtech technologies are bringing great opportunities to the insurance sector and accelerating the industry’s transformation. Advances in AI and data science are leading insurers toward the effective use of machine learning, data modeling and predictive analytics to improve back-end processes and streamlining and automation of the front-end experience for both consumers and insurance companies.
Here are five ways that insurance companies are applying AI and data to the industry:
1. Front-end sales, underwriting and policy service
Customers are acquiring insurance policies much faster and easier with the help of automated processes. These technologies differ depending on the systems that employ them and the people they serve. Integration gateways relying on data and AI are creating new customer experiences.
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2. Back-end claim services
AI, IoT, predictive analytics and data modeling let insurers refocus claims so that it is easier to file, submit, adjust and reimburse claims. This means customers have their claims settled in an expedited manner. Patterns of fraud are detected, learned from and shared via modeling and the AI that combs them for key information.
3. Business intelligence and big data
Smartphones, telematics and sensors from wearables and connected homes provide a wealth of new data. In a connected world, insurers can generate insights from both external and sensor-based data sources. How this data is collected, stored and used will determine whether insurers will build or lose trust with customers. Take necessary measures to harden networks so that the threat of cybercrime is reduced.
4. Customer experience
Insurance companies need to offer their services in a way that encourages loyalty, customer retention and loss mitigation. This can be made possible by making policy acquisition easier and keeping policyholders engaged. It’s now common for insurers to monitor driving, health and home behavior through mobile apps and wearables. In exchange for the data, carriers offer lower or customized premiums to customers whose score reflects reduced risk.
5. Customized insurance
Carriers offer insurance packages and plans based on a matrix of factors. This requires their agents to possess extensive knowledge about products as well as their new and prospective clients. Through machine learning, millions of data patterns can be analyzed to identify the most appropriate customized plan or product for a particular customer. It can even be offered to them via AI.
Data modeling and artificial intelligence are advancing rapidly. They are laying the foundation of an industry equipped to quickly take clients from prospect to policyholder with minimal touch points and reduced risk.
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Where exactly these technologies will lead us next is anyone’s guess, but carriers have begun to realize the benefits. A historically slow-to-move, conservative industry is now more nimble, innovative and tech-savvy than ever before. Transformation is here!