For a historically paper-intensive industry, the pace of digital transformation is no small change for insurers. At the same time, the risk landscape has shifted over recent years. For example, drivers who used to have monthly car insurance premiums now pay for their coverage by the mile, and cyber insurance policies have become more important than ever for companies as workers have left the office for remote working.
Looking to the future, insurance companies need to focus on the experience customers want from insurance coverage and take a more digital approach to risk. To remain competitive, insurers need to be able to adapt their insurance products to external shifts more quickly. The use of data and automation will be central to such efforts.
While all insurance providers have experienced changes in the way their customers engage with them over the past year, the pandemic has placed specific demands on insurance technology.
Alongside those pandemic-induced disruptions, here are four key areas where we see digital innovation—specifically automation and new ways of using data—driving the most significant change in the insurance industry more broadly:
Carriers will need to focus on how automation can enhance the customer experience especially as younger demographics demand digital insurance solutions.
Insurers are using new types of geospatial data on physical assets for predictive modeling and machine-assisted identification of more profitable risks, making the underwriting process more efficient. Data from Internet of Things-enabled devices can inform premium pricing calculations in real-time. Commercial auto fleets can use real-time information about high-risk routes to make rerouting decisions.
Carriers who have invested in understanding their customers’ experiences, preferences, product choices and behaviors will continue to have a significant competitive advantage.
Perhaps one of the most overlooked process improvements is around salvage and subrogation. Companies have developed new technologies to improve identification of recovery potential. This technology automatically identifies blind spots in the recovery/subrogation process using real-time data; uses automated workflows including claims and recovery; and can be integrated into existing processes and systems.
The insurance industry has for years been moving toward being more digitally enabled, and the massive virtual shifts during the pandemic have been forceful directional vectors for modernization. Companies need to be nimble and think strategically in order to take advantage of technologies such as artificial intelligence, machine learning and predictive analytics in developing new products and reaching new customers. A trusted partner can help guide your team along the journey of embracing new technologies and understanding how they continue to shape the market.
This content was originally published on RSMUS.com.