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ITL/Innovator’s Edge
Insurtech/Risktech Drive Insurance Industry Innovation
Many insurers and industry service providers recognize the need to improve customer experience and engagement and are embracing tech innovation that offers multiple ways to achieve such improvement. Insurers claim professionals, brokers and even risk managers are all stakeholders in the pursuit of the best ways to leverage technology to address risk and/or insurance related problems. The solution sets are known as insurtech and risktech depending on whether you’re a buyer or a seller of risk and insurance solutions.
Innovation in insurance can mean many things. It can mean adopting new business models, making internal processes much more efficient, adopting new technologies to drive the creation and delivery of new products and services, and transforming how the insurer meets customer needs.
The reasons behind this growing movement to embrace innovation are two-fold:
• One is to meet customer expectations for digital services, shaped by their preferences and experiences with the likes of Amazon, Google, Netflix and Uber.
• The second is for competitive reasons—to keep up with insurance companies that are faster to adopt tech and innovate, as well as defend against potential competition from insurtech startups and tech giants that see opportunity to serve insurance customers.
Advances in technology and how it can be applied to elements of the insurance value chain offer many innovative ways to improve the insurance customer experience, reduce friction and potentially build increased engagement and satisfaction
Check Out: Top Insurtech Companies
Multiple insurtechs, for example, are re-imagining how insurance products can be designed to be more appealing to consumers. One such innovation is usage-based auto insurance, in which on-board telematics devices or smart phone apps measure a policyholder’s driving behavior and usage and adjust premiums accordingly. The concept of paying to insure only what you use, rather than buying a year’s worth of coverage for a car that sits idle, may open new consumer segments for insurers.
Companies offering usage-based auto insurance products include Metromile, Root and By Miles.
Another product innovation is on-demand insurance, in which coverage is activated for a specific product or activity for a limited duration.
Insure your snowboard, for example, just for the weekend trip to the mountain. Insurtechs active in this area include Trov, Slice and Jauntin, among others.Another product innovation taking shape would eliminate the need to buy coverage at all, by embedding insurance within certain products. Automakers like Tesla and BMW, to name a few, are exploring this model to deliver additional services to customers with whom they already have a relationship.
The concept of paying to insure only what you use, rather than buying a year’s worth of coverage for a car that sits idle, may open new consumer segments for insurers
Meanwhile, another area of innovation is the proliferation of new sources of data, and the ability of technology like artificial intelligence to rapidly analyze it and offer new insights. Life insurers, auto insurers and small business insurers are simplifying the application process by using trusted third party data sources to gather additional information about a specific risk to support underwriting and pricing. Such an enhanced analytical capability also creates the ability to make more precise risk differentiation, making the cost of insurance better aligned with the actual risk profile of a consumer.
Companies that are using data analytics, A.I. and other technology to enable this simplification include Terrene Labs, DataCubes, Planck Re and others.
To improve the customer experience in the claims area, many insurers and claim service providers are searching for ways to make the process simpler and faster for consumers, without giving up their ability to accurately estimate a loss and contractual obligations or impact the relationship aspect of quality claim handling. A growing number of insurers and third party administrators have embraced customer apps that use visual recognition technology to allow policyholders to snap photos of a damaged car or home, upload to the insurer and have the claims process begin, or even make a claims payment on the spot for certain types of claims by analyzing the visual data against databases of damage costs, repair costs and so on.
Not only does this save time over scheduling a claims rep to visit and inspect, but it also builds customer engagement by involving them in the process. Examples of companies offering these solutions include Snapsheet, Right Indem, ViewSpection and others.
Some insurers are also using technology to provide first notice of a loss, allowing the customer to bypassfiling a claim at all. Using sensors in cars, homes and other property, the devices can communicate when an accident occurs, or structural integrity is impaired and more. Insurtechs in this area include Octo Telematics, Xtract and Motions Cloud.
The opportunity to reduce friction, simplify processes and improve customer engagement is growing. Interest among many industry providers is strong and growing in finding ways to boost satisfaction and increase customer retention through enhanced loyalty. Insurtech/risktech innovation is charting a new and exciting path toward achieving these goals.
Check This Out: Top Risk and Compliance Solution Companies
