Tech innovations that can transform the Insurance sector by 2021

Despite the many economic impacts of the COVID virus around the globe, the current pandemic has largely been a health problem. Among the severely impacted, India now ranks among the top 3 countries in the total number of cases and deaths.

In this age of global pandemics and health crises, is the insurance sector responding to the changing global scenarios through more customer-centric life and health insurance plans? When it comes to technological innovations, no industry sector – including insurance – can now hope to survive (or scale to the next level) without adopting the latest cutting-edge technology.

Going forward, here are the top 5 technological innovations that are set to transform the insurance industry in 2021:

1. Data-driven innovations

Data is driving most of the technological innovations across various industries – and it is no different for the insurance sector. With the majority of insurance users wanting services that are customized to their personal needs, insurance providers are now leveraging Big Data to rope in more customers.

An example of this is a U.K-based insurance company that is offering lower health insurance premiums to fit and healthy individuals (with a higher score on their fitness trackers).

Other data-driven innovations that we can expect in the insurance industry include geriatric healthcare, the use of drones in home inspection, and through the Internet of Things – that we shall discuss in detail later.

2. Artificial Intelligence (AI)

The adoption of AI in the insurance sector has so far largely been restricted to faster processing of new customer policies and settlements. Going into the next decade, AI will be leveraged into developing personalized health packages – and much more.

An example of this technology trend is a China-based insurance company that launched an AI-enabled diagnosis platform to provide online health advice to its customers – with over 500,000 consultations each day.

Additionally, a few of the key technology trends that will be shaped by AI in the coming decade include the use of personalized data from sensors (or any connected device), deep learning technologies to process large swathes of insurance data, and the use of AI algorithms in preparing risk profiles.

3. Blockchain

While AI can transform the customer experience, blockchain technology is poised to bring more transparency into the entire insurance chain. Apart from that, blockchain is expected to improve efficiency, cost savings, and enable faster payouts and claim settlements.

The industry potential for blockchain in the insurance industry is so high – that the global market for this technology is expected to reach $1.39 billion by the year 2023.

Among other use cases of blockchain in the insurance sector include anti-money laundering practices, fraud mitigation, automatic claims handling, and handling Know Your Customer (or KYC) norms.

4. Internet of Things (or IoT)

With the increasing number of connected devices, the Internet of Things or IoT technology can help in data collection and analysis from physical devices. Among the benefits of IoT in insurance include accuracy in risk management, cost savings, and even fraud prevention.

For instance, data gathered from IoT sensors can help supply chain insurance companies accurately monitor real-time data about transported goods during transit. On a similar note, IoT data collected from commercial properties can help in monitoring property maintenance, risk analysis, and early detection of any property-related issues.

With the ever-increasing improvement in IoT, this digital technology holds great potential to transform the insurance sector with faster and accurate results.

5. Robotic Process Automation (or RPA)

Like it or not, every insurance company must deal with loads of repetitive administrative tasks like underwriting, claims processing, and addressing customer queries. One technology that can automate these tasks is Robotic Process Automation (or RPA) – which can drastically reduce operational costs and the workload.

Going by a Capgemini report, RPA can improve productivity in insurance companies by 50%. In another recent use case, a global consultation firm could save annual work time of 54,000 hours with 85% accuracy – after adopting RPA.

Conclusion

Technology innovations have caused major disruptions in global industries including the insurance sector – while creating new opportunities for insurance players to tap into. Through this article, we have only outlined a few ways in which technologies like AI, Blockchain, and IoT are transforming the way insurance companies operate in today’s dynamic environment.

Does this mean that you should go ahead and adopt each of these technologies into your insurance company? Not necessarily. Choose the technology that offers the most value to the insurance domain that you are operating in – before diving in.