Technology has always been a major driving force in society. Every advancement changes the way that we live and work. The Industrial Revolution is a clear example of how machines were able to boost productivity, increase wealth, reduce prices, and raise standards of living. Now we are in the midst of an Information Revolution thanks to the Internet, artificial intelligence, and related technologies. The adoption of technology is no longer seen as a strategy to add value but a necessity for survival. We spoke to industry leader Mark Vanzo on how tech has helped the insurance industry:
The disruptions caused by COVID-19 made business continuity a major challenge for everyone. Fortunately, we live in a world where it is possible to work remotely, and many were able to transition right away. It turns out that the only thing holding companies back was the fear of the unknown. The insurance industry is particularly suited to this shift in working arrangement since it deals mostly with information instead of physical products. Tech allows employees to work from home and collaborate with their colleagues. Customers can also access services electronically for their convenience.
Insurance companies are always under pressure to generate more sales. The traditional marketing methods that they use are incredibly expensive while not always yielding the desired results. Many are on the lookout of viable alternatives to TV commercials, banner promotions, and event sponsorship. Online advertising campaigns are becoming more popular because these cost much less while performing much better. It is easier to track the effectiveness of each chosen strategy, allowing marketers to optimize their campaigns over time. At a time when it is hard to reach out physically to new audiences, online marketing allows businesses to bridge the gap.
By shifting to paperless data acquisition, insurance companies can drastically improve their workflow. They can process forms quickly instead of waiting for clerical personnel to manually enter the information on their database. They can also cut off the middlemen by interacting with the customers directly through their websites. Quotes are readily provided through online tools with minimal information necessary. Insurers can also automate the processing of claims and applications. Their systems can even provide people with updates at every stage for their peace of mind. This improves business productivity while enhancing user experience and reducing overhead costs.
The insurance industry revolves around risk. Companies need to calculate the risk in a reliable manner to prevent unnecessary losses and provide competitive rates. Each type of insurance will require the consideration of multiple factors. Traditional models may be highly limited due to the lack of data. For example, they might only consider things like age, chronic conditions, smoking, alcoholism, job type, and other common markers for medical insurance. These days, insurers can use the data gathered by wearable devices to gain greater insight into people’s health and wellness. This can give them a clearer picture of each individual’s current status, as well as their efforts to improve their health. They might offer discounts for excellent metrics.
Indeed, insurers can now get a wide range of information real-time from customers or potential customers. The data can be helpful in their risk assessments and premium offerings. By getting a continuous stream of data, they can quickly react to changes in behavior instead of waiting for the end of the year or the contract to conduct reassessments. For example, commercial vehicle insurance may become partially dependent on sensors installed on trucks and buses. If these constantly detect abnormal and dangerous behaviors, then they may become grounds for increasing the premium. Of course, good behaviors can be rewarded as well. Insurers can provide feedback through an app to ensure pricing transparency.
Insurance companies are also using big data and predictive modeling to detect fraudulent claims. Tech can help them find red flags based on historical information. Algorithms may detect patterns of behavior that keep repeating. Investigators can then delve deeper into the case to see if there is truly an anomaly or not. Powerful computers can analyze massive amounts of data from open sources and come up with actionable insights. They can finish the initial stages much faster than manual methods. Experts can then focus on the few leads generated instead of having to sift through all of the information themselves.
Insurers can launch their own mobile apps to help their customers manage their coverage without having to go to their offices. The apps can keep a record of vehicle service history and provide reminders for the maintenance schedule. These can also provide digital insurance ID cards so that people don’t have to fumble through their wallets to find theirs. These might also help stranded individuals get roadside assistance and towing services. Some apps allow users to take pictures of vehicle damage and submit these for quick estimates. By getting reliable information through the app, they no longer have to go to an auto shop. The apps can also give a direct line of communication to company representatives through chat. Frequently asked questions and answers may also be available.