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It almost goes without saying that technology has radically transformed the insurance industry, enabling companies both large and small to automate manual business processes, gain a deeper understanding of their customers through data analytics, and even leverage augmented reality to optimize employee training. There really is no shortage of high-tech, industry-specific solutions on the market today, and the list of benefits they offer is just as lengthy.
Join us as we explore some of the top insurance technology trends contributing to the industry’s continued evolution.
Enhance Customer Satisfaction with a CRM System
A customer relationship management (CRM) system is an essential tool within any insurance company’s arsenal. More than a claim system, sales system, or customer service system, a CRM aggregates all customer-related data — including their current policies, claims history, personal preferences, and more — within a single database, providing a 360-degree view of the customer. Given the breadth of detail it offers, a CRM is truly a one-stop shop for handling inquiries and delivering exceptional experiences throughout the customer journey, from point of sale through to processing a claim.
Identify New Target Markets with Predictive Analytics
From identifying customers at risk of cancellation to engaging in predictive risk scoring, predictive analytics is already a much-beloved technology within the insurance industry, with seemingly endless applications. Perhaps the most valuable application for this cutting-edge insurance technology, though, is to target potential markets.
There’s no question that the current insurance industry is as competitive as it is volatile. In order to maintain market share in an increasingly crowded space, today’s insurers need to use every tool in their arsenal to get ahead — including data. According to a Capgemini report, over 40% of insurers are leveraging data to enter new markets, with many “shifting from protection to prevention, and revisiting actuarial assumptions.” For example, a carrier might analyze public data about the prevalence of cybercrime and data leaks to determine risk levels and whether it makes sense to enter the rapidly growing cyber liability insurance market.
Optimize the Claims Process with Field Service Management Software
Field claims adjusters are an integral part of any insurer’s team, tasked with assessing damage reports, investigating claims, and making key decisions about customer coverage. Given how important their role is, insurance companies should look to optimize assignments and workflows for adjusters in the field in the interest of boosting productivity, reducing costs, increasing job satisfaction, and improving the quality of customer service.
With that in mind, insurers would do well to invest in a field service management solution with out-of-the-box capabilities that enable them to:
- Automatically assign claims to the appropriate adjuster based on factors such as their skill set, availability, and proximity using a field service scheduling engine.
- Assign and dispatch claims to adjusters via smartphone or tablet to increase mobile productivity and provide faster, more efficient service.
- Optimize routes and task time management to reduce travel times and minimize mileage.
- Manage preferred contractors within the system as independent field service resources.
The ideal field service management system should seamlessly integrate with an insurer’s existing claims system for full circle process automation from First Notice of Loss. It should even integrate with an insurer’s CRM system to extract valuable insights and draw correlations between customer profiles and claims that drive informed decision-making.
Mitigate Risk with the Internet of Things
The Internet of Things (IoT) refers to a vast network of physical objects that utilize sensors and software to send and receive information over the internet with other similarly enabled devices. Though there’s no shortage of insurance-specific use cases for IoT, one of the most valuable is to mitigate risk.
For evidence of this, look no further than the auto insurance industry. By embedding IoT-enabled sensors into a vehicle, insurers can monitor that vehicle’s speed, acceleration, steering wheel rotation, engine temperature and pressure, oil levels, and more, all in real-time. Based on these and other data points, insurers can proactively identify whether a vehicle requires routine maintenance or repairs and notify the policyholder. The idea behind this is that if the vehicle is well-maintained and kept in good working condition, it’ll prevent a minor fender bender from turning into a much higher claim.
The same is true for any insurance sector:
- Home insurers can leverage IoT-enabled moisture sensors to detect water damage or mold early on.
- Health and life insurance companies can use IoT-enabled wearable devices to monitor policyholders’ heart rate, weight, and exercise levels and offer them rewards to incentivize healthy habits.
- Commercial insurers can utilize embedded sensors to monitor environmental conditions within commercial infrastructure, such as CO2 levels, smoke, mold, and other toxic elements.
By using IoT to stay apprised of various risk factors and spur policyholders to act accordingly, insurance companies have the opportunity to address molehills before they have the chance to become mountains.
Offer Usage-Based Policies with Telematics
From Progressive’s Snapshot program to UnitedHealthcare’s Motion program, insurance companies are no strangers to using IoT-powered telematics to gauge customers’ risk levels and incentivize good behavior with specialized rewards. But in 2023 — and beyond — we expect to see insurers finding new and innovative uses for telematics technology, chief among them to design custom, usage-based policies.
The premise is simple: Rather than pay a standard premium, customers only pay for the coverage they actually need based on usage metrics collected using telematics devices. Usage-based insurance is already a common practice in the auto insurance sector, where costs are determined based on a variety of factors, including how many miles and what times of day motorists drive, how often they brake hard, sudden changes in speed, idle time, phone usage while behind the wheel, and more.
These metrics provide insurers with direct insight into their customers’ behaviors and average use, which they can then leverage to deliver custom policies in the form of pay-how-you-drive and pay-as-you-go programs. Pay-as-you-go programs, in particular, are based on mileage and closely mirror Insurance as a Service, which gives customers greater flexibility when choosing their coverage. Companies that do not currently offer some form of usage-based insurance also have an opportunity to grow their list of available product offerings to policyholders.
Given the growing popularity of “Everything as a Service” and the increasing sophistication of telematics technology — including the granularity of the data, it’s able to collect — we can likely expect usage-based policies to become more popular across all insurance verticals in the years to come.
Democratize Development with Low-Code Technology
As discussed, the modern insurance industry is a highly saturated and incredibly competitive landscape. Under the current conditions, insurance companies not only need to find innovative ways to expand their offerings and maintain a competitive edge — but they also need to demonstrate to customers that they offer the latest and greatest in insurance technology. This presents insurers with a distinct dilemma: Either build out their own enterprise systems (a tall order, given the persistent developer shortage and the often prohibitive cost of custom builds), or outsource development to a third-party provider (an affordable option, but quality can vary substantially by vendor).
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Fortunately, there’s a third option: low-code development. Compared to traditional programming, which requires a significant amount of manual coding, low-code development enables even insurers to design and develop applications with a graphical user interface and easy-to-use drag-and-drop tools. In doing so, low-code platforms democratize development, making it accessible even to those with no formal training or development background. This is a game-changer for insurers because it empowers them to spin up new, custom-built applications with relative ease, allowing for greater agility and accelerating product development and time-to-market.
Take Hiring to the Next Level with Augmented Reality
Employee training can be time-consuming and challenging to effectively implement. Turnover only adds to the time spent on employee training, as new staff cycle in month after month. A growing number of insurance companies are addressing these challenges by supplementing their existing training programs with augmented reality (AR) — a technology that overlays computer-generated graphics and digital elements in real-world environments.
By wearing AR-enabled equipment in the field, new or junior adjusters can enable more senior, experienced agents in the office to see what they see — all in real-time — and provide guidance and answer questions. This capability is also invaluable when training adjusters for pre-quote surveys and claim survey visits because senior team members can help assess the situation without having to travel or rely on static pictures for information. Most importantly, AR enables adjusters to get on-the-job training and test out new skills in a real-world setting.
Training only scratches the surface of AR’s capabilities — already, insurers are finding innovative uses for AR, such as risk assessment and mitigation, customer engagement, damage estimation, and more. AR and other closely related technologies such as virtual reality and extended reality are expected to remain insurance technology trends, so stay tuned.
Simplify Claims Processing with Artificial Intelligence
Data from the National Association of Insurance Commissioners indicates that consumers complain most frequently about how claims are handled. In fact, across all insurers, 68% of all complaints are related to claims handling. Whether it’s due to unnecessary complexity, poor visibility, lack of follow-up, or slow settlement speeds, the claims process has long been a source of frustration for insurance customers. The good news is that insurers are now able to alleviate this frustration using artificial intelligence (AI).
Let’s look at a few key benefits of this transformative insurance technology — using AI, claims departments can:
- Leverage natural language processing (NLP), a form of AI that utilizes machine learning to “read” and extract meaning from text, to automatically capture customer and claims data from paper-based forms and printed documents in order to streamline the claims process.
- Reduce call volumes by using virtual assistants to collect customer information, handle the submission of damage reports for first notice of loss, recommend service providers, and help customers schedule service appointments. By using AI to handle high-volume, low-cost insurance claims, insurance companies enable agents to prioritize more complex claims, resulting in expedited claims resolution across the board.
- Generate automated recommendations for next-best actions based on claims management data analysis, thereby enhancing decision-making.
- Recognize abnormalities in customer claims and risk management data in order to proactively identify and prevent fraudulent claims.
- Enable customers to easily file claims, monitor the status of existing claims, update account information, and more without the need for agent intervention.
Design More Streamlined Workflows with Robotic Process Automation
From underwriting and onboarding to policyholder services and claims management, insurance is an industry seemingly defined by complex, often tedious processes. And in order to derive greater value from their existing workforce, cut down on costs, and increase overall customer satisfaction, insurers must find ways to complete these various processes with greater efficiency.
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That’s where robotic process automation (RPA) comes into play. RPA is a form of business process automation that utilizes artificially intelligent, rules-based bots to perform basic tasks — and that can be applied to almost any back-office insurance operation. For example, insurers can use RPA to:
- Integrate claims data from multiple sources for faster, more efficient processing (and happier customers)
- Aggregate underwriting data from internal and external databases, enabling underwriters to begin analysis that much sooner
- Automatically interpret data from registration forms and channel it to the appropriate workstreams, simultaneously improving data accuracy and fast-track onboarding for new members
- Automatically collect customer data — including personal information, existing policies, and prior claims history — to expedite service and support requests
- Send out policy renewal alerts to existing customers and automatically cancel lapsed policies based on established rules and procedure
- Integrate newly implemented solutions with legacy systems for the seamless extraction and transfer of data, thereby supporting organization-wide modernization efforts
This list is just a sampling of how insurance companies can benefit from RPA. In truth, the potential applications for RPA are limited only by an insurer’s imagination, making this a must-have insurance technology for 2023.
Gain a 360-Degree View of Your Entire Organization with a Unified Ecosystem
Ensuring that systems are tightly integrated and able to seamlessly communicate with one another is just as important as any exciting insurance technology investment. By integrating systems and developing a truly unified platform, insurers are able to consolidate company and customer data, break down departmental silos, develop more streamlined workflows, and gain vital visibility across their entire organization. This visibility is, perhaps, the most important of all because it ultimately enables insurers to make informed, data-driven decisions that help them bring new products to market, execute on strategic goals, and accelerate company growth.
The insurance industry is rapidly changing, with technology leading the way. Having helped over 100 insurance companies establish strategic approaches to new and emerging trends within the marketplace using the Microsoft platform, Hitachi Solutions is more than qualified — and ready — to support your company’s technological evolution. In fact, we’ve even developed our own IP, Engage for Insurance, to help insurers like you achieve a faster return on their technological investment through shorter implementation times and by leveraging battle-tested industry best practices.