What is Insurtech?
More and more companies are realizing the benefit of data management systems to gain insights into their customer base. This includes the insurance industry. From underwriting through contract signing, brokers and policyholders alike are seeing the benefits of artificial intelligence through this new technology. This is commonly known as Insurtech, or insurance technology, that is using ever-changing innovations to take big data and make it work for an insurance company from the top down.
You might be asking yourself, what is Insurtech? It’s at the heart of distribution and administration throughout the insurance industry. Insurtech helps large insurance companies explore new options outside traditional human efforts. This can lead to dynamically-priced insurance policies and provides insurers access to data streams from Internet of Things, or IoT, devices. These technologies not only lead to lower costs on premiums but help insurance providers to get a better understanding of the market conditions in the insurance space, as well as customer behavior.
Artificial intelligence automates human functions for quicker and more accurate responses to understand insurance products. Machine learning allows insurance companies to collect vast amounts of data to gain important insight through their algorithms. This Insurtech phenomenon has paved the way for insurance carriers to get a better understanding of their customer bases, as well as their brokers and underwriters. IoT technology can help better risk analysis, letting insurance companies get real-time analysis of a policyholder. For example, GPS trackers can record a car’s speed and braking pattern, allowing a car insurance provider to get a grasp of the risk behind a prospective new policy.
Key Applications of Insurtech
New insurance technology is allowing the insurance sector to expedite the entire process behind coverage from agreeing to terms and conditions to fulfilling claims. The Know-Your-Customer process for customer identification allows for insurers to collect all counterparty information to verify identities. Insurtech companies have used blockchain to develop software that stores customer identification details from issuing authorities. This enables an insurance company and broker to have complete control over all customer records. This same blockchain technology is used to create a standard claims document for underwriters to evaluate in real-time.
Insurance professionals are able to rely upon smart contracts for automated processes that allow for the authentication and negotiation of insurance coverage faster than ever. For example, life insurance companies are able to initiate payout quickly by just confirming the passing of a policyholder without having to trouble the grieving family. This clear claims quicker, reducing the chance of fraud and increasing customer satisfaction. This also paves the way for easier fraud detection by verifying the authenticity of signatures and of claims through all lines of coverage in the insurance industry.
Benefits of Insurance Technology
nsurtech is driven by the consumer, ergo the benefits to the consumer are exponential. These innovations in technology allow for insurance customers to have a greater hand in the process from registration to claims. This enhanced level of knowledge makes for a better customer experience. Insurance companies are expanding their access with evolving technology. For example, a car insurance company may offer a smartphone app that allows policyholders to submit a claim in real-time, even from the spot of a car accident with photos and driver information.
Insurtech also saves time and money for insurance underwriters, reinsurers, and brokers. By keeping fraud at bay, insurance companies save on manpower in investigating these falsified claims. Insurance technology also simplifies the underwriting process, while also introducing new methods in the distribution of coverage. This allows insurance carriers to promote innovative new products with smart contracts that go beyond traditional claims. Automation and machine learning are helping insurers and insured get ahead of the game.