InsurTech is a buzzword these days, and it refers to a group of technologies that are poised to disrupt the old insurance sector. Many insurers have already gone digital in order to provide their consumers with ease, security, choice, and comparison.
The Internet of Things (IoT), telematics, drones, the blockchain, smart contracts, and artificial intelligence (AI) are all enabling new ways to assess, control, and price risk, engage with customers, cut costs, improve efficiency, and improve customer experience.
What is insurtech?
Insurtech, which combines the words insurance and technology, is the result of the convergence of digitisation, disruptive innovation strategies, and the insurance industry.
The insurance sector, which is strongly linked to banking and finance, has decided to accompany this sector forward in modernising, digitising, and growing using new technologies in recent years, owing to the intense focus on Fintech.
The recent application of cutting-edge technologies such as artificial intelligence, machine learning, as well as the emergence of startups dedicated to providing this type of solution to create disruptive insurance products, has strengthened and consolidated the need for the implementation of Insurtech.
Uses of insurtech
Fraud arises in a variety of forms. Every year, insurance fraud costs businesses billions of dollars all across the world. Insurance businesses should set up a digital foundation, take advantage of enhanced automation and analytics, and take preventative measures.
Without a doubt, digital signature technology is reducing the number of fake insurance account activations and, as a result, fraud. For example, claims on a specific day when insurance is acquired after an accident can be reduced using digital signatures that verify the purchase was made after the incident.
Data mining tools and quantitative analysis are used in the technology. Fraud can be detected via data analytics. Predictive analytics aids in the detection of fraud and the avoidance of claim payouts. The use of analytics to analyse claims and fraud transactions improves risk management.
A type of secure record-keeping is blockchain. Many insurtech organisations and firms are looking to employ blockchain technology to improve privacy and security.
- Preventing fraud entails detecting malevolent or illegal action.
- Smart contracts: To make data transit and storage more efficient.
- Maintaining the secrecy of financial transactions and medical records by tracking sensitive data.
Internet of things
The internet of things (IoT) refers to the use of internet connectivity in common consumer goods like refrigerators, vehicles, and smartphones, as well as in commercial activities like smart factories. Insurers may use this technology to collect and analyse data as well as communicate with customers in innovative ways.
Lower underwriting costs
By 2020, the number of internet-connected devices and sensors is expected to reach 50 billion, resulting in a considerable increase in the amount of real-time data available to insurers for improved pricing and underwriting. At least in terms of underwriting, drones are satellites on steroids. Satellites have revolutionised the way house insurance plans are created in the event of a fire. A lot of things have come from drone footage underwriting.
Lower insurance rates
Fitness applications or wearable devices: Getting in shape offers numerous advantages. Some fitness apps, such as Wysa, and wearable devices can help you maintain your weight, eat healthier, and feel better.
Most importantly, they can help you save a significant amount of money on your health insurance premiums. Various insurance companies are using wearable devices to keep their customers informed on how to stay active and healthy, as well as to provide them discounts and perks if they reach certain fitness goals.
Self-driving car: Self-driving automobiles will reduce life insurance premiums in the future. Because road deaths account for a major portion of all deaths worldwide, any modest decrease will result in fewer deaths and, as a result, fewer life insurance claims.
Each type of insurance is unique, and the elements that are appropriate for one are not appropriate for the other. This necessitates specialised expertise on the part of the insurance brokers, which the internet can facilitate.
Machine learning, on the other hand, is critical. It has the ability to learn and analyse billions of patterns in order to identify appropriate underwriting clauses and particular customisable plans for consumers based on the information provided. This can alter the consumer’s opinion of the insurance company and result in a more engaged customer who is more inclined to stay.
Emerging technologies have created numerous opportunities for insurers to keep up with the times. Delivering a consistent client experience, and develop new services and products.
Despite the fact that the insurance sector is a highly regulated, complex profession with several legal requirements, interesting changes are beginning to take place. Why should insurance be left behind when the technological revolution improves other aspects of our lives—banking, healthcare, and communications? Some people find insurance to be tedious, but we at 7startup it’s a crucial way to safeguard your financial future, so the easier it is to obtain, the better.