Technology is playing an increasingly central role in the insurance sector, particularly in driving competition between brands.
Technology is increasingly prominent in the insurance industry, both in "behind the scenes" processes and in how insurers interact with their customers.
Technology is increasingly present at all stages of insurance operations, and there's a vast scope of technology in play, including artificial intelligence (AI), machine learning (ML), and blockchain.
All are now well-established technologies, but the insurance sector is leading the way in harnessing these to enhance operational efficiency and customer experience. For example:
Let's explore a handful of specific use cases for different technologies in the insurance industry.
There is also massive potential in using technology to provide added value services to customers. For example, anyone with one of our international health insurance plans can access our employee or member assistance programmes, depending on their plan type. These services, along with access to telemedicine, are provided at no additional premium cost and are features that help aid retention.
In the past, these wouldn’t necessarily be available remotely, instead being exclusively delivered in person. Thanks to technology, even people who are living and working in remote areas overseas can take advantage of these features to enhance their health and wellness. The days of exclusion due to the nearest medical facility being hours or even days away are long gone. People can relocate overseas and take out health insurance products confident in the knowledge they can access a broad range of services without being reliant on a country’s healthcare provision.
The increasing use of data science to aid decision-making, sometimes independent from but often in conjunction with humans, is another vital feature of the modern insurance industry. For example, data science can help to deliver more accurate risk assessments and underwriting decisions. Not only does this make life easier for insurers and underwriters, but it can pave the way to better outcomes for customers as they can get fair, accurate, and personalised pricing based on their circumstances.
In much the same way, data science can help stakeholders understand what customers want, leading to better strategic planning and development of new products and added value features. This brings insurers closer to their customers, making them feel like the insurer-customer relationship is a partnership rather than a business transaction.
While reducing fraud is a means of reducing costs, it's worth exploring how tech does this.
In the first instance, using data science and AI and ML to deal with large databases to deliver accurate risk assessments and pricing is an initial defence against fraud.
In addition, AI and ML, in conjunction with big data and data science, can play a vital role in claims management processes. For example, insurers can set up systems to automate the assessment and payment of straightforward claims while having "red flags" that highlight when a claim requires human evaluation and insight. On top of reducing fraud, better claims management processes also lead to cost reductions and mean loyal customers don’t face unnecessarily higher premiums.
Thanks to its secure and verifiable nature, blockchain will have a significant role to play in fraud prevention but will also have an impact across the insurance industry.
It's already part of many companies' ecosystems and could become the foundation of all operations in the next few years. The capabilities that blockchain could drive include the following:
When it comes to insurers using blockchain, the latter point may be the most significant in driving competition. While blockchain is an innovative technology that will help deliver better service delivery, if several companies use the same datasets, it will become more crucial for competitors to differentiate themselves and demonstrate how they provide value to their customers.
The technologies mentioned above will undoubtedly become increasingly influential throughout the next decade. Indeed, the most innovative insurance companies are using most of them now. While blockchain is likely the least used right now, this should change as understanding of the technology improves, and barriers to entry subsequently reduce.
Another significant development is likely to be companies exploring whether the metaverse is a commercial opportunity to enhance the customer experience and if such platforms can act as a point of difference in a hugely competitive marketplace.
It's clear that advanced technology is in the insurance industry to stay and will be a pillar of the competitive landscape for years to come. The businesses that best harness these tools to transform their operations while delivering exceptional customer experiences will become the market leaders by the decade's end.