Given that, it should come as no surprise that the insurance industry has also experienced significant changes, particularly as it relates to technology. As such, we can expect technology within the insurance industry to continue to evolve in the coming year. While it’s anyone’s guess what “normal” ultimately will mean, there are a few trends we can expect to see impacting insurance now.
1. The Big Accelerator: COVID
According to Google Trends, the global search term ‘uncertainty’ rose approximately three times between the end of December 2019 and mid-September 2020. Without a doubt, the COVID pandemic has unmasked risks and uncertainties that very few individuals and companies ever considered just two short years ago.
COVID has also forced insurance organizations and executives to think about this new landscape and how to use it as an opportunity to drive innovation. The insurance industry has often been viewed as slow-moving and reserved. COVID has accelerated changes in underlying conditions and challenges, driving the industry to increasingly embrace new technologies. But is the industry responding fast enough?
2. The Insurance Technology Gap
With more pressure to provide tech solutions to customers as an alternative to face-to-face contact, there has been an urgency in the demand for technology. On the plus side, technology is enabling the insurance industry to undergo a positive transformation. This fundamental shift for the industry will allow for better customer service while improving operational efficiency — supporting two critical components for a business today.
Much of this technology has largely been focused on the customer experience — instant service, straight-through processing, and more.
There is also a tremendous opportunity to help insurance organizations, and the people within them, use technology to make teams and staff more effective, particularly in a world where work-from-anywhere is becoming the trend. Many companies opted to go fully remote, and some are giving employees the option to never return to the office. These organizations need the right tools to maximize productivity and facilitate collaboration.
While the industry is taking a lot of positive steps in the right direction, innovation in the insurance industry can be slowed by reliance on legacy systems. Difficulties with adopting new technologies and processes quickly can create problems when insurers are trying to meet the expectations of customers, and workers, in younger, all-digital generations.
3. Mobile Apps
One key to appealing to all consumers, and especially to younger consumers, is the ability to deliver services through mobile applications.
About 1.96 million mobile apps are available for download in Apple’s App Store alone, and those mobile apps are expected to generate about $935 billion in revenue by 2023.
Average Americans check their phones every 12 minutes, with 88% of the time on mobile devices spent on apps.
For insurers, developing secure, functional and engaging mobile apps for consumers is now a critical requirement.
A straightforward, user-friendly app can help customers get information and complete tasks without the need to involve a human agent. Self-service allows insurance organizations to automate back-end processes and enable more digital intake, leading to lower costs and a better customer experience.
4. Blockchain Technology
Accenture reports that the global market for blockchain technology in insurance will grow to $1.39 billion by 2023.
An alternative to cloud storage, blockchain has far-reaching applications across numerous industries. Its advantages include transparency and security. The data stored in the blockchain is decentralized, preventing corruption.
For insurance, blockchain can help insurers reduce the administrative costs associated with handling claims and verifying payments made by third parties. It supports data sharing and provides strong protection against fraud: All information in the distributed ledger is recorded as blocks linked to each other. This provides traceability, which helps simplify inspections.
Many experts believe the full potential of blockchain technology still remains to be discovered.
5. Artificial Intelligence
According to Juniper, global AI in the insurance marketplace is expected to surpass $4.5 billion by 2026.
For the insurance industry, AI has the potential to make almost anything from customer service to fraud prevention more efficient. Today’s insurance companies are using AI to better analyze data and deliver more personalized services based on it, such as flexible contracts that meet the needs of the client. Chatbot implementation will also enhance the user experience by making it possible to process submissions, check details, and perform other common operations much faster.
An area often overlooked for AI in insurance, is information discovery and knowledge management. Both insurance carriers and agents have tremendous challenges when it comes to accessing information real-time, often hidden in thousands of documents and daily updates. AI-driven search has the potential to provide results unparalleled in speed and accuracy.
While technologies such as AI, blockchain, mobile will continue to grow in 2022, they represent just a small part of a great insurance technology ecosystem. The bottom line is that insurance companies will need to adopt new technologies to meet the needs of customers and stay competitive in the market.
Even though technology has the ability to enhance the quality of life, the one thing it can’t do is replace people, especially in insurance where being there for fellow humans in times of need with compassion and patience are vital to the industry. At the end of the day, insurance will always require real human connections.
