Today, more than five thousand insurance companies in the USA operate mainly in three domains – auto, home, and commercial insurance. Traditional business models drove the insurance sector. However, to better serve the customers and have the edge over their competitors, the companies have turned to technology.
Modern and advanced technologies have seen exponential growth in the insurance sector in the past decade. They have completely transformed the way the industry operates and have become an indispensable part of it.
- Artificial Intelligence (AI)
AI is playing a significant role in transforming the insurance industry. AI apps and tools have simplified many tasks and processes. For example, finding out the home insurance premium amount and other related information was a manual and tedious task.
However, AI can help customers find answers to complex questions such as “How much is the home insurance premium?”, “How much insurance will be reimbursed ?” etc., in a matter of minutes, even seconds through smart assistants.
Similarly, AI helps insurance companies by simplifying processes such as claims settlement and fraud detection. Furthermore, using AI algorithms can help in pattern recognition to identify easy leads that can be quickly converted to customers.
- Internet of Things (IoT)
Internet of Things(IoT) is the term used to describe devices that can connect to the internet, such as laptops and mobiles. IoT has made it easy for customers to share their data efficiently. This, in turn, has helped insurance companies better understand their customers and provide them personalized and improved services.
Additionally, IoT can help companies decide the insurance rates, underwriting policies, mitigating risks, and preventing frauds and losses. And the impact of IoT in the insurance sector is unending. As per a report, the number of IoT devices is expected to increase to a massive thirty billion by 2025, compared to thirteen billion in 2021. This will further streamline and simplify processes in the insurance industry.
- Social Media
Social media is proving to be an excellent tool for the insurance industry for advertising and marketing purposes. By analyzing social media data, insurance companies can create tailored and customized marketing campaigns that can help attract new customers and keep existing customers engaged. You can also use these platforms to nurture your leads by providing relevant information about your insurance plans.
Similarly, social media can also be used to interact with customers, help them file claims, and even detect insurance claims frauds. For example, insurance companies can monitor customers’ social media activities and file claims to detect any discrepancies.
Chatbots prove to be an excellent tool to provide 24Ã7 customer support. Using AI and machine learning, chatbots can intelligently interact with customers, helping save time and money while providing a seamless customer experience. For instance, the chatbot can guide a customer through the insurance application process or other tasks.
The chatbot can be text or voice-based, depending upon the company’s need, budget, and scale. Chatbots are going to be the future of customer communication. It is estimated that chatbots will be used for ninety-five percent of customer communication across various industries in the next five years. Insurance companies, too, are expected to increase their investment in chatbots in the upcoming years.
Blockchain is a Distributed Ledger Technology (DLT) wherein a ledger of records is kept securely via cryptography and computational power in blocks, which are incorruptible. Thus, blockchain helps insurance companies to carry out speedy, secure transactions. Similarly, it also helps improve transparency and accountability, fraud detection and prevention, and customer trust. As per a report by Ernst and Young, blockchain can end error, negligence and detect fraud by providing a decentralized digital repository to verify the veracity of customers, policies, and claims independently.
- Predictive Analytics
Predictive analytics can help insurance companies to predict customer behavior by analyzing the data collected from various sources such as social media, websites, etc. Predictive analytics will help insurance companies in the following ways:
*Identifying insurance claims frauds
*Identifying risks of cancellations
*Recognizing claims patterns
*Managing and settling claims quickly
*Insurance premium and package pricing
*Anticipating future customer and industry trends
Predictive analytics, therefore, has the potential to improve various aspects and operations in the insurance sector, leading to business growth for the companies.
In addition to these technologies, machine learning, automated drones, and telematics are driving the insurance industry forward. These technologies have presented the insurance sector with tremendous growth opportunities. They have also led to the creation of modern, new services. With further advancements in technologies, the upcoming years will be exciting for the insurance sector.