Since Covid 19 has hit, this has kickstarted a huge shift in the way that insurance companies operate, creating more opportunities for the customers and companies alike, across a range of insurance sectors: such as cars, technology and life insurance. Companies are now incorporating modern technology into everyday operations, looking to stay ahead of the curve and boost operating profit, through the use of technology, this can have huge changes on the insurance industry.
How Insurance is Getting Digitised and Automated
Much of the process regarding registering a claim or taking out a policy is now automated, saving time for both the customer and employees. Upon registering online, many claim payments can now be issued automatically, speeding up the resolving process and minimising the chance of human error. This has made a drastic change to the process for the end-user, making it less tedious and also more straightforward and simpler. With the increased demand for personalisation and efficiency, technology is beginning to deliver this in a more productive way than ever before.
How Insurance Technology is Affecting Different Areas of the Industry
Car insurance is one of the main areas that have been affected by technology, with the increasing popularity of contract hire gap insurance, which pays for the difference in outstanding finance balance and a motor insurance settlement if a vehicle is written off. Many car insurance users are able to complete claims and renew their insurance online, which has reduced costs for the insurance companies as they need fewer staff to operate their call centres. The increase of artificial intelligence and predictive analytics can support insurance companies to predict and identify trends before they happen, such as formulate insurance prices based on risks and statistics. Anticipating trends can help identify the likelihood of cancellations and volume of claims, enabling better forecasting and budgeting.
How Technology Adoption is Helping Insurers’ Revenues
Technology adaptation is helping to increase insurers’ revenues, with reports such as the McKinzey report valuing claim reductions through the use of automation to be around 30% more cost effective. This can allow insurers to price and underwrite their policies more effectively and accurately, creating growth opportunities but also cutting costs for their bottom line. Digitalisation can also create increased personalisation, enabling meaningful engagement with customers across multiple channels, further creating incentives and ease of renewing or changing policies, as this can be done online and through their own individual customer portal. Quick and easy access to information has helped the customer make informed decisions, better suited to their specific needs.
Although technology can have its positives and negatives, it is essential that insurers utilise technology effectively into their business model to stay ahead of the curve and relevant in the current digital environment.