Technology not only adds mere value to the Insurance Sector but it’s now determining the level of growth and evolution of this sector. The use of technology has changed the way claims used to process earlier by companies and policies assessed by insurance agents. Insurance companies are now able to build a strong bond with their customers and at the same maximize their profits owing to the data analysis and value of legitimate customer interactions.
Technology is now an enabler for generating growth i.e. the future of any insurance company would now depend on the type of technology it uses and how well it can bring its advantages into use. If the technology is more effective, then ultimately it results in greater growth.
The inclusion of new technology and innovations into the process has created a pressure into the insurance companies to keep pace with the cutting edge technologies and at the same time offer an enhanced customer experience and also remain competitive in the market. In order to sustain growth and constantly generate profits, the online or digital marketing processes have helped the insurers to reach out to the maximum crowd directly. Traditional advertising methods are replaced by online PPC advertising campaigns which are economical as well as retain the same objectives.
There are some other technology trends as well which made a vital impact on the Insurance Industry. Those are listed below:
Increase in the usage of the Internet of Things (IoT) by Insurance Companies:
There has been an increase in the usage of IoT by Insurance Companies in the past few years. With the decline in the cost of sensors, enhanced methods of communication and increased data processing, the use of IoT has been increased. One is of the major benefits is that the data which is transmitted by IoT can be analyzed using data processing techniques for the useful insights in the Insurance Industry.
Use of Big Data to improve the claim process:
Through Big Data analytics, it is now possible for the insurance companies to identify and report events in a fast and effective way. Now, the claim assessment activity can be automatically assigned based on the complexity of the claim. It is also possible for the insurance companies to execute the subrogation and settlement process in an effortless manner, which was a big challenge earlier because of the enormous amount of data.
Social Media and Collaboration:
The impact of social media has helped to connect people and had generated a platform for the people to collaborate and share information. It helps to improve decisions and processes both internally with carriers and externally with the distribution channel.
Cyber Insurance:
Inspite of high information security divisions and several best practices to prevent cybercrime are implemented by the insurance companies, it is still impossible to ensure ultimate protection from these cyber crimes. The World Economic Forum has termed Cyber risk as one of the potential global threat. The cyber insurance covers various damages and helps to mitigate risk by offsetting costs involved after recovery with a cyber-related breach or any similar events.
The entry of Non-Traditional firms in Insurance:
Through partnership and alliances, the non-traditional firms are entering the insurance value chain. These new entrants are majorly focusing on the distribution portion of P&C and health insurance. They are expected to tackle the challenges on the regulation front, since the insurers are highly regulated than the present business which they are operating.
Use of Digital Imagery:
The technical advancements used by insurance companies ensures seamless data management, provides a quick response to catastrophe events, avoids risks and helps in detecting fraud. It also reduces the cost of insurance companies processing claims. In spite of its various benefits, it also has a few challenges for its implementation.
The bottom line is Insurance companies are aware of most of the existing technologies and have considered the potential advantages of utilizing such technologies to compete in the future market. The insurance companies and the customers have benefitted from the use of the technology in the insurance sector and hence it is proved to be a useful weapon to speed the digital transition and ensure success and growth.
By Rakesh Goyal, Director, Probus Insurance.
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