The Future of Insurtech: Surviving in the New Normal
Insurance Sector Outlook
2020 saw economy-wide crisis and numerous changes in consumer habits, expectations, and behaviours. The COVID-19 pandemic led to an increased awareness around insurance among all stakeholders—from regulators to banks and insurers, and especially to consumers. Its aftermath resulted in an industry-wide impact on employment and business globally, affecting specifically property-casualty lines harder than ever.
Though life insurance has become an essential commodity amidst vulnerability and uncertainty, global premium income saw a decline in life and property insurance. As per the Allianz Global Insurance Report 2021, strong growth is expected with USA and China being prominent markets. This research also suggests that recovery in life (+5.2%) will be sturdier than the P&C segment (+4.2%).
New trends in the Insurance sector
Virtualization took over as the new normal, urging leading Insurance players to cope with customer needs and adopt a digital transformation. Majority of them chose to free up investments for critical areas required to survive, and prioritize in InsurTech.
Here are some of the trends in InsurTech which are expected to impact sector significantly:
1. Predictive Analytics
This is one of the best ways to maximize the gold mine of data that organizations are currently using. Data-driven forecasting of consumer behaviour helps in building patterns, especially in claims management. Insights driven by big data can help in plan optimization, identifying outlier claims, predicting trends, and risk /fraud management. Here the biggest challenge comes of data collection from scattered resources to identify patterns. This may be streamlined with the power of connected devices.
Robotic Process Automation can help eliminate many redundant manual tasks that can be easily automated such as data entry, name screening, compliance checks, consumer data validation, data visualization, and dashboards. This can also be used to enhance the customer experience by improving customer support through chatbots. Another widely implemented use case in the industry is where text-heavy document processing can be made easier with Intelligent Document processing (IDP). Bots can further collect and analyse data in real-time for smoother collaboration with agents.
Customers are offered tailored solutions based on their past behaviour and interactions. Their activities are analysed using an omni-channel approach and multiple data points. For instance, quotes can be customized based on data collected from different sources and assessed on risk profiles, factual and behavioural information.
The power of connected devices helps in resolving the biggest challenges of collecting data scattered across different sources. This can then be cleaned, scanned, and filtered to generate valuable insights. The connected car, smart homes, and wellness tracking devices are some of the digital ecosystems that are commonly used these days. For example, Aetna, a leading healthcare insurance provider has integrated Apple watch in its wellness plan to collect user’s health-related data and easily identify behaviours to personalize user’s experience
5. Self-service Portals
Consumers are more self-reliant and want to access services on the go. With self-service portals, it becomes easier to compare, access and purchase policies without any assistance from an agent. Further, AI-powered chatbots can help resolve user queries and enable them to navigate easily across the portal. This delivers immense cost-savings and an enhanced customer experience.
Undoubtedly, the pandemic has fuelled digital transformation in the Insurance sector, as it has across the world. Industry leaders will be required to innovate faster and adapt to the new normal of consumers. Learning from this experience, decision makers would be required to prioritize on technology investments that enable them to be future-ready for any such outbreaks.
Read more about our expertise at play with these success stories: https://www.gslab.com/fintech
Co author/ contributor of the blog: Amandeep Litt | Senior Marketing Executive
Kumar Iyer | Director Customer Success – Fintech
With over 22 years in the IT industry, Kumar Iyer has worked in various capacities such as design architect, project manager, program manager and business head. He started his career as a C/C++/Java programmer and today is instrumental in managing & delivering Fintech solutions for GS Lab customers. He has a keen interest in emerging technologies and how they shape the Fintech and IT solutions.